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2011 (11) TMI 203 - AT - Service TaxPeriod of limitation – assessee collecting service tax from customers from 01.05.2001 – registered themselves with the service tax authorities on 09.01.2003 - Commissioner (Appeals) reduced the quantum of penalty u/s 78 & set aside the penalty u/s 76 - validity of penalties on ground that assessee deposited service tax before issuance of show cause notice - Held that:- It is a clear case of knowingly evading the service tax and even after collecting service tax not paying the same to the Central Government. Therefore, invocation of extended period of limitation for the demand of service tax is fully justified. Since it is a case of willful evasion of service tax and not depositing the amount collected as service tax, the penalty under Section 78 is also warranted. Inasmuch as a penalty under Section 78 is being sustained, there is no justification for restoring the penalty under Section 76 as sought for by the department. However, the Commissioner (Appeals) has clearly erred in reducing the penalty imposed by the original authority under Section 78 without any valid reasons. Therefore, such order is set aside and order of the original authority in this regard is restored. Decided partly in favor of Revenue.
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