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2018 (5) TMI 1466 - AT - Service TaxPenalty u/s 78 - the appellant had delayed the payment of service tax under reverse charge mechanism but the interest amounting to ₹ 24,87,141/- due thereon had not been discharged by the assesse, at the behest of the department, the appellant later on paid full interest liability on 18.06.2016 - Held that: - when the appellant was asked to pay the interest for delayed payment, the appellant paid interest on the delayed payment. Both the amount of service tax due and interest amount were admittedly made before issuance of show cause notice which was issued 7 months after all dues have been cleared. From the spirit of the Board Instructions dated 08.07.2016, the intention was to encourage voluntary compliance and introduce the consultation process for evading issuance of show cause notice. The situation in the present case is Revenue neutral as the duty was paid under reverse charge mechanism and the Cenvat credit would only be availed by the appellant himself - reliance placed in the case of Modern Woolens vs CCE, Jaipur-II [2016 (11) TMI 1353 - CESTAT NEW DELHI], where it was held that whatever Service tax was required to be paid by the appellant, was available to them as cenvat credit. As such, the entire situation is revenue neutral, in which case, no malafide can be attributable to the appellant. The imposition of penalty under Section 78 is not justified - appeal allowed - decided in favor of appellant.
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