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2016 (5) TMI 944 - AT - Service TaxImposition of penalty - Section 78 of the Finance Act, 1994 - Construction of Complex Services - Appellant prayed that financial difficulty is a reasonable cause for non-deposit of the tax with the Revenue and as such Section 80 should be invoked - Held that:- We really fail to understand that how the collected amount, which was required to be deposited, can lead to any financial hardship on the part of the assessee inasmuch as it was collected amount only which was required to be deposited. Instead of depositing the same, the appellant have retained it for their own financial gains. We can appreciate financial difficulty to some extent if the said service tax was required to be deposited by the appellant from their own pocket. Even in that case, the appellant was under obligation to reflect their liability to the Revenue, by taking a registration and filing ST-3 returns. The use of the amount collected by the appellant from their customers in the name of the service tax, instead of depositing the same with the Service Tax Department, clearly reflects upon the malafide intention of the assessee. In such a scenario, the provisions of Section 80 cannot be invoked, in as much as the said section speaks of a reasonable cause, which is bound to be bonafide cause. The fact that service tax was being collected by the appellant from their Customers reflects upon their knowledge that the services being provided by them attract service tax. Pocketing of the said collected amount is indicative of the appellant's malafide to divert the exchequer's legitimate amount for their own financial gains, thus making them liable to penalty. - Decided against the appellant
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