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2019 (1) TMI 1311 - HC - Service TaxImposition of penalty u/s 73(4) read with Section 78 of the Finance Act, 1994 - non-payment of service tax - it was alleged that for certain period starting from 2006-07, 2007-08 to 2008-09 [April to September] the appellant had not paid the entire service tax liability but only discharged a part thereof and also did not pay the amounts due in time - suppression or mis-representation of facts - Held that:- This Court is of the opinion that the impugned order is justified and warranted in the circumstances. Whatever be the constraint, the assessee was faced with, it was duty bound to remit amounts collected by it towards service tax, in a planned manner, and as required by law. The deposit belatedly, by it, on the ground that the amounts were deposited on adhoc basis due to operation of a centralised system, cannot be a legitimate excuse. What is evident is that the assessee/appellant withheld the amounts collected from the service recipient as tax liability. As the remitter, assessee/appellant was duty bound to comply with the terms of the Finance Act and Rules, which prescribed not only filing of returns but also periodic deposit of these amounts. The delay in deposit of these amounts spanned over a period of two and half years and therefore, amounted to misreporting of true and correct facts. To that extent, the Show Cause Notice was justified. The finding of misreporting too was warranted. As far as the penalty goes, the provision under Section 78 of the Act, and also even Section 73(4), leave no manner of choice; it is a matter of course. Benefit of reduced penalty - Held that:- The only mitigating circumstances whereby the penalty could be reduced might have been if the assessee had deposited the reduced amounts within 15 or 30 days of receipt of the Show Cause Notice as indicated in proviso 1 and 2 to Section 78 - In the present case, concededly, reduced penalty amounts were not deposited by the assessee, which is a statutory mandate. No doubt they were paid in the interregnum, at a later stage, pursuant to the permission granted by this Court on account of pre-deposit order made by the CESTAT [after 03.10.12, having regard to the order in CEAC 8/2012], however, that did not in any manner mitigate the appellant’s liability; it ought to have deposited the reduced penalty amounts within the time stipulated by law. Appeal dismissed - decided against appellant.
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