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2018 (5) TMI 323 - AT - Service TaxLevy of Penalty u/s 78 - correct value was declared in the ST-3 return but service tax was not paid - short paid service tax with interest paid before issuance of SCN - invocation of Section 73(3) of FA - whether the penalty imposed under Section 78 upon the appellant is legal and correct? - Held that: - From the facts available on record and submissions by both sides, it is found that though the appellant have not paid the Service Tax in time but they have correctly declared the value of the service provided including those value which was escaped from payment of Service Tax. Therefore when the correct value was declared, intention to evade Service Tax is not established against the appellant. Accordingly the ingredients available for imposing penalty under Section 78 do not exist. If these be so the appellant was clearly entitled for none issuance of show-cause notice by the Revenue in terms of Section 73(3) of the Finance Act, 1994. The appellant have not suppressed any fact by declaring the correct value in the ST-3 return, their case is covered by Section 73(3). In the present case, the appellant though collected the Service Tax from their client but they have clear intention to pay the Service Tax as correct value declared in the ST-3 return. Therefore merely because the Service Tax was collected the ingredient available under Section 78 does not get attracted. Appeal allowed - decided in favor of appellant.
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