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2018 (8) TMI 1681 - AT - Service TaxPenalty - delay/default in making payment of Service Tax - Business Auxiliary Services - Held that:- The facts reveal that the default was only for a short period. The appellant had filed the service tax returns disclosing their liability. Further, demand has been computed by the department basing on the documents furnished by the appellants like invoices, balance sheet etc. maintained by them in the ordinary course of their business. All this would go to show that the failure to pay the service tax was only due to the financial stringencies. It is very much clear that the non-payment of service tax was not by fraud, collusion or suppression of facts with intention to evade payment of service tax. There was only a default/delay in making the payment that too only to financial stringency. A substantial amount is paid much before the visit of the officers. Even then, Show Cause Notice has been issued raising demand for the entire period and the adjudicating authority has confirmed equal penalty on the demand for the entire period - Even then, Show Cause Notice has been issued raising demand for the entire period and the adjudicating authority has confirmed equal penalty on the demand for the entire period. When the demand or the service tax liability for the disputed period is paid by the appellant alongwith interest and ST-3 returns having been filed accompanied by late fee, the department ought not to have issued show cause notice, as provided in Section 73 (3) of Act ibid, since, as found above, the ingredients of sub-section (4) of the same section 73 cannot be alleged. Penalty u/s 78 is unjustified - the penalty imposed u/s 78 of the Finance Act, 1994 set aside, without disturbing the demand of service tax or the interest thereon or the penalty imposed u/s 77 of the Act ibid - appeal allowed in part.
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