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2023 (9) TMI 69 - CESTAT CHENNAILevy of Penalty u/s 78 of FA - suppression of facts or not - manpower supply agency service - reverse charge mechanism within the meaning of Section 66A of the Finance Act, 1994 read with Rule 3(iii) of Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 - extended period of limitation - HELD THAT:- The Hon’ble High Court of Karnataka in the case of COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX VERSUS M/S ADECCO FLEXIONE WORKFORCE SOLUTIONS LTD [2011 (9) TMI 114 - KARNATAKA HIGH COURT] had an occasion to consider a similar situation where the Revenue having appropriated the duty liability as well as interest, had issued Show Cause Notice, wherein the proposal was made again to appropriate the amount already paid towards the duty liability and interest and also thereby proposing penalty, had deleted the penalty so levied since there was no loss to the exchequer. The issue of penalty came up for the consideration before the High Court of Karnataka in the case of COMMISSIONER OF SERVICE TAX, BANGALORE VERSUS MASTER KLEEN [2011 (9) TMI 788 - KARNATAKA HIGH COURT] where it was held that It is unfortunate that inspite of statutory provisions, the authorities have issued a show cause notice claiming penalty. So, tax and interest was paid before issue of show cause notice. Therefore, the Tribunal was justified in setting aside those orders. As the said order is strictly in accordance with law we do not find any legal infirmity that calls for interference. It is found that the same reasons apply even for invoking the larger period since other than mere alleging suppression, no documentary evidence is placed on record - the Show Cause Notice is therefore clearly issued only for levying penalty and to this extent, the above decision of the Hon’ble High Court of Karnataka in M/s. Adecco Flexione Workforce Solutions Ltd. squarely applies. The demand for the normal period alone upheld - appeal disposed off.
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