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2018 (4) TMI 1184 - AT - Service TaxPenalty u/s 78 - appellant reversed the credit and deposited the service tax alongwith interest on the imported services under reverse charge mechanism and service tax along with interest on the expenses reimbursed from the subsidiary and intimated the same to the department and requested not to initiate any penal action - invocation of section 73 (3) of FA - Held that: - as the appellant has immediately paid the amount of service tax alongwith interest and the same intimated to the department and prayed not to take any coercive action. It shows that there was no positive act of suppression on the part of the appellant. In this case, from the facts it is to be ascertained whether there was any intention to evade payment of service tax by the appellant or not. As it is admitted position that in this case the service tax is to be paid under reverse charge mechanism, this is a situation of revenue neutrality. For the reimbursement of expenses recovered from the subsidiary, service tax is not payable. To allege suppression with intent to evade payment of service tax, there should be positive act on the part of the assesse with intent to evade payment of service tax - The Revenue has not given any positive evidence to evade payment of service tax. This is a situation of revenue neutrality and the service tax is not payable on reimbursement of expenses - penalty not imposable u/s 78 when the proceedings come to an end in section 73(3) of the Finance Act/ 1994. Appeal allowed - decided in favor of appellant.
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