2009 (8) TMI 21 - AT - Service Tax

Penalty Amount of Service Tax and Interest deposited before issuance of SCN - held that - the penalty is leviable even if the duty and interest have been paid before issue of show cause notice and there is no discretion with the authorities to impose lesser amount of penalty than the duty confirmed. In these circumstances the first thing to be seen is whether there is any suppression or mis-representation with intent to evade payment of service tax. If there is any suppression or mis-representation with intent to evade payment of service tax then the ratio of the decision of the Hon ble Supreme Court is fully applicable - In the impugned Order there is no finding in this regard. Matter remanded for deciding afresh

Summary

The Appellate Tribunal CESTAT, KOLKATA, under the leadership of S.S. Kang, Vice President, heard an appeal filed by the Appellant against an order by the Commissioner (LPA), which stated that authorities have no discretion to impose a lesser penalty than the confirmed demand. The Commissioner based his decision on a Supreme Court ruling in the case of Dharmendra Textiles Processors vs. UOI. The Appellant argued that the Supreme Court decision was applied without consideration of fraud, suppression of facts, or misrepresentation with intent to evade payment of duty. They requested a remand to determine whether there was any suppression or misrepresentation with intent to evade service tax payment. The Revenue contended that the Appellant had not paid service tax on time and was therefore liable for a penalty. The Tribunal found that the Commissioner's order lacked a finding on suppression or misrepresentation with intent to evade service tax, and thus remanded the matter back to the Commissioner for a fresh decision on the penalty issue. The appeal was allowed by way of remand. The decision was pronounced and dictated in open court by S.S. Kang.