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2019 (6) TMI 689 - HC - Service TaxPenalty u/s 78 of the Finance Act, 1994 - Invocation of Extended period of Limitation - proviso to Section 78(1) of the Finance Act, 1994 - suppression of facts or not - HELD THAT:- The parameters/conditions for purpose of invoking the extended period of limitation under Section 73(1) of the Finance Act, 1994 are similar/identical to the conditions for imposing equivalent penalty under Section 78 of the Finance Act, 1994. In the facts of the case, the appellant had advisedly and correctly not challenged the invocation of the extended period of limitation for recovery of service tax. The challenge is only to the imposition of penalty and is based on the fact that there is no willful suppression on the part of the appellant as all the due liabilities had been declared in ST-3 Returns, though not paid over to the Revenue. Section 78 of the Finance Act, 1994, equivalent penalty can be imposed in cases of willful misstatement or suppression of facts or for contravention of any of the Act or Rules made thereunder with an intent to evade payment of service tax. In this case, it cannot be disputed that the appellant after having recovered the service tax from its customer had not paid over the amount to the State. Thus, undeniably they have contravened the Finance Act, 1994 and Rules made thereunder, which obliges the assessee to make over the payment to the Government before the specified date - The financial difficulties faced by the appellant can never justify the non-payment of tax to the Government. The above fact coupled with misrepresentation to its customers that the amount collected from them will be paid over to the Government, would clearly point to mala fide conduct on the part of the appellant. Therefore, we see no reason to interfere with the impugned order of the Tribunal. Appeal dismissed - decided against appellant.
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