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2018 (2) TMI 2026 - HC - Service TaxLevy of penalty - Section 73 of the Finance Act of 1994 - service of Practicing Chartered Accountant provided - appellant had paid the arrears of tax and interest prior to the issuance of show cause notice - suppression of facts or not - Whether the proceedings under Section 73(3) of the Finance Act, 1994 in this matter could be said to be justified by any of the reasons stated in sub-section(4) of Section 73 of the Act? HELD THAT:- It is true that in various cases like COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX VERSUS M/S ADECCO FLEXIONE WORKFORCE SOLUTIONS LTD [2011 (9) TMI 114 - KARNATAKA HIGH COURT] , that the levy of penalty imposed on the ground of delayed payment of Service Tax was set aside as the tax was paid prior to issuance of show cause notice. However, the present case has a distinguishable feature. In the present case, the undisputed fact reveals as reflected from the Order of the Assessing Officer that the assessee came up with a plea before the Assessing Officer that he has rendered services to Karnataka State Financial Corporation (KSFC) and it is the KSFC which has not cleared the bills of the assessee and in those circumstances, the assesee was not able to pay service tax - it is also established that non-payment of Service Tax was not due to delay but on the contrary it was willful non payment of service tax with an intention to evade payment of Service tax. Thus, the assessee suppressed the facts and made willful mis-statement before the Assessing Officer and in those circumstances, the benefit of Section 74, 78 was not extended to him. In the light of the categorical finding of fact arrived at by the Assessing Officer keeping in view Section 73(4) of the Finance Act of 1994, merely because tax was paid before the issuance of show cause notice, it can never be said that the penalty cannot be imposed upon the appellant - appeal dismissed.
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