Case Laws
Acts
Notifications
Circulars
Classification
Forms
Manuals
Articles
News
D. Forum
Highlights
Notes
🚨 Important Update for Our Users
We are transitioning to our new and improved portal - www.taxtmi.com - for a better experience.
⚠️ This portal will be fully migrated on 31-July-2025 at 23:59:59
After this date, all services will be available exclusively on our new platform.
If you encounter any issues or problems while using the new portal,
please let us know
via our feedback form
, with specific details, so we can address them promptly.
Home
2019 (2) TMI 1841 - AT - Service TaxImposition of penalties - mismatch between the ST-3 returns figures and the amounts recorded in the accounts manual - HELD THAT - Appellant deposited an amount of Rs. 4, 99, 377/- with interest with the authorities before the issuance of the show cause notice but has not discharged an amount of Rs. 43, 191/- till date. Both the lower authorities have confirmed the demands raised and also appropriated the amounts deposited and imposed penalties under Section 78 which is equivalent to 50% of the tax liability confirmed. Tax liability of Rs. 43, 191/- and consequential interest and penalties - HELD THAT - There is no case for the assessee as they have not paid any amount on this account in order to claim leniency. Demand of tax liability of an amount of Rs. 4, 99, 377/- - demand already paid alongwith interest - time limitation - HELD THAT - This amount has been paid by the appellant on 29.02.2016 along with interest. Show-cause notice is dated 03.03.2017 and the said show-cause notice is invoking only the demand within the period of limitation i.e. 30 months as per the provisions of Section 73(3). If that be so in my considered view provisions of Section 73(1) of the Finance Act 1994 will directly apply and lower authorities should not have issued any show-cause notice for this amount seeking to impose penalty. Since in respect of an amount of Rs. 4, 99, 377/.- appellant has already paid the amount before issuance of show-cause notice and the show-cause notice also is not invoking any extended period for this amount the impugned order to the extent it upheld the penalties on this account is unsustainable and liable to be set aside - tax liability with interest upheld - penalty set aside. Appeal disposed off.
Issues:
1. Contesting penalties imposed by lower authorities. Analysis: The appeal before the Appellate Tribunal CESTAT Hyderabad was directed against an order-in-appeal dated 06/03/2018. The appellant contested only the penalties imposed by the lower authorities. The audit department found a mismatch between the ST-3 returns figures and the amounts recorded in the accounts, indicating tax liabilities on certain services. The appellant had paid one tax liability amount but not the other. Both lower authorities confirmed the demands, appropriated the amounts deposited, and imposed penalties under Section 78, equivalent to 50% of the tax liability confirmed. Regarding the unpaid tax liability, the Tribunal found no grounds for leniency as the appellant had not paid any amount on this account. However, concerning the paid tax liability of a specific amount, the Tribunal noted that the appellant had already paid it along with interest before the issuance of the show-cause notice. The show-cause notice invoked only the demand within the period of limitation under Section 73(3) of the Finance Act 1994. Therefore, the Tribunal held that penalties imposed on this amount were unsustainable and set them aside. The Tribunal upheld the tax liability and interest but set aside the penalty imposed on the amount already paid by the appellant. The appeal was disposed of accordingly, with the penalties on the paid tax liability being set aside, while the tax liability and interest were upheld.
|