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2015 (2) TMI 611 - AT - Service TaxPenalty u/s 76, 77 & 78 - Discrepancy was noticed between the turnover reflected in the balance sheet and the turnover in the ST-3 returns - Held that:- From the appeal papers as well as the Commissioner (Appeal)'s order, I find that the appellant claimed before the Commissioner (Appeals) that the discrepancy which resulted in the alleged non-payment of duty is only because of the accounting system. While the balance sheet was prepared on mercantile basis, the payment of Service Tax is reflected in the ST-3 returns is on receipt basis. I note that the correct legal position during the relevant time was that Service Tax was required to be paid only on receipt basis as per Section 77 of the Finance Act, 1994. The learned Counsel pleaded that so called short payment is only about 4% of the total Service Tax paid during the four years in question. In these circumstances, neither was there short payment nor was there any intention to avoid payment of duty. I also find that Hon'ble High Court of Karnataka held in the case of Master Kleen (2011 (9) TMI 788 - KARNATAKA HIGH COURT) that the show-cause notice should not have been issued especially when the appellant paid the Service Tax within a week of being pointed out. The learned Counsel is not contesting the duty demand because he fairly concedes that even though amounts were received later they would have had to pay Service Tax in later years. In view of the facts and circumstances of the case and the Hon'ble High Court judgment in the case of Master Kleen (2011 (9) TMI 788 - KARNATAKA HIGH COURT), I find that no case for imposition of penalty is made out. - Decided in favour of assessee.
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