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2019 (6) TMI 1023 - AT - Service TaxImposition of penalty - service tax paid on being pointed out - Manpower supply services - reverse charge mechanism - suppression of facts or not - invocation of extended period of limitation - Revenue neutrality - HELD THAT:- Appellant was liable to pay tax which they failed to pay. But on being pointed out the audit party, without waiting for any notice from the department, the Appellant immediately deposited the entire service tax amount along with interest much before the issuance of show cause notice. This shows that there was no intention to evade payment of duty. A perusal of the impugned order would show that there is no discussion or finding about the issue of revenue neutrality raised by the Appellants. It is settled law that where credit is available to an assesee itself it cannot be said that there is any intention to evade payment of duty. From the records, it is found that although the issue of ‘revenue neutral’ was raised by the Appellant before both the authorities below, but none of the authority have either discussed or disputed or rejected the same - thus the transaction is revenue neutral. Also mens rea is not established for imposition of penalties since here also it is revenue neutral. Admittedly the Appellants have paid the service tax amount with interest much before the issuance of show cause notice. Penalties cannot be imposed - other demand upheld - appeal allowed in part.
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