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2018 (6) TMI 1084 - AT - Service TaxPenalty u/s 77(2) and 78 of FA - service tax collected but not paid to Government - also service tax registration not obtained - Held that:- In the case of Sri Velmurugan Sago Factory Vs. Commissioner of C. Ex., Salem [2016 (12) TMI 646 - CESTAT CHENNAI], this very Bench of the Tribunal was considering an identical issue and held that When in the first place there was no requirement of issue of SCN itself, penalties will not survive particularly as there was some confusion on the duty rates and the continued eligibility of SSI concessions for these appellants. There is no dispute with regard to the fact that the appellant has paid the duty along with interest at least three years before the issuance of Show Cause Notice, the demand of penalty equal to 15% imposed under 2nd proviso to Section 78 of the Act is bad and unsustainable. So also the fact that the appellant had obtained registration prior to the Show Cause Notice, the same is sufficient reason to hold there was no violation or contravention of Section 77(2). Appeal allowed - decided in favor of appellant.
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