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2012 (9) TMI 336 - AT - Service TaxPenalties under Sections 76 and 77 - appellant had paid service tax promptly as soon as the omission was pointed out - appellants were under the impression that they were not required to pay interest and after paying service tax they had intimated the department on 19-12-2008. However no reply to this letter was received and the department initiated proceedings by issuing show cause notice on 12-7-2009 and even though the appellant paid the interest as soon as the show cause notice was issued - CBEC has also issued a letter dated 3-10-2007 wherein the field offices have been directed not to commence proceedings where the assessee discharges full amount of service tax and interest Penalty under Section 78 – Held that:- Where there was no need for the appellants to resort to suppression or mis-declaration since whatever service tax was to be paid, they were eligible for the credit - By evading the payment of service tax, the appellant stands to lose rather than getting any undue benefit. By delaying payment of service tax, the assessee had to pay interest on the amount which is not available as cenvat credit - in this case, suppression of fact or mis-declaration could not have been invoked for imposition of penalty under Section 78 of the Finance Act, 1994 - there is no other evidence to justify imposition of penalty - appeal is allowed
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