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2017 (10) TMI 899 - AT - Service TaxPenalty u/s 78 - malafide intent or not? - Held that: - the said non-payment was detected by the department on investigations made against them. It cannot be held that such non-payment of service tax or even non-disclosure of the value of the same in the return was on account of the non-receipt of compensation from the clients. The appellant has not placed any evidence on record to show that they had not received the value of the said services from their customers for such a long period - the payment of service tax is the legal obligation of the service provider, irrespective of the fact of receipt of value of the service from service recipient. All these factors lead to an inevitable conclusion that there was malafide on the part of the appellant to suppress the value of the services and not to pay service tax on the same - penalty u/s 78 upheld. Service tax alongwith interest paid before issuance of SCN - 73(3) of the Finance Act, 1994 - Held that: - sub-section 4 of section 73 is to the effect that sub-section 3 shall not apply in a case where service tax has not been levied or paid on account of fraud; willful mis-statement; or suppression of facts. As already held that non-payment in the present case was on account of suppression and with malafide, the provisions of section 73 (3) would not get attracted. Invocation of section 80 - Held that: - there was no reasonable cause on the part of the appellant to believe that the service tax was not required to be paid. Accordingly, the said section is also not applicable to them. Reduction of penalty to 25% in terms of the proviso to section 78 - Held that: - the benefit of reduced penalty can be extended only if the entire service tax along with interest and along with 25% penalty is deposited within 30 days of the passing of the order of determination of service tax. Such being not the case, penalty cannot be reduced. Penalty upheld - appeal dismissed - decided against appellant.
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