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2014 (8) TMI 785 - HC - Service TaxIssuance of SCN and levy of penalty where service tax with interest paid before issuance of show cause notice - Business of software development and training to corporate - training in relation to SAP - exemption for 'vocational training services' - Penalties under sections 76, 77 and 78 - Held that:- service tax along with interest is paid before the issue of show-cause notice and it is clearly noted down in the show-cause notice. Further, there is no allegation regarding evasion. Therefore, the subject show-cause notice is not at all valid, hence, on this ground alone the impugned order needs to be set aside. Circular No. 137/167/2006/CX-4 dated October 3, 2007, which provides conclusion of adjudication proceedings including penalty proceedings, when the requirement under section 73(3) is complied with. Therefore, the penalty proceedings under sections 77 and 78 should also be closed on payment of service tax along with interest before the issue of show-cause notice, when there is no wilful suppression/ fraud/collusion. On this ground also, the impugned order needs to be set aside. Sub-section (3) of section 73 of the Finance Act, 1994, provides that, where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person chargeable with the service tax, or the person to whom such tax refund has erroneously been made, may pay the amount of such service tax, chargeable or erroneously refunded, on the basis of his own ascertainment thereof, or on the basis of tax ascertained by the Central Excise Officer before service of notice on him under sub-section (1) in respect of such service tax, and inform the Central Excise Officers of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the amount so paid. Therefore, it is clear before the issue of show-cause notice the assessee acknowledges the leviability to pay the entire service tax due with interest and pays the same; then the authorities are precluded from issue of show-cause notice - Decided against Revenue.
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