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2019 (12) TMI 236 - CESTAT BANGALOREImposition of penalties - Security Agency Service - amount of service tax collected was not paid to the Department - the appellant has paid all the taxes along with interest before the issue of SCN - HELD THAT:- The appellant did not pay the service tax and also did not file the return and short payment of service tax was detected by the Department during the audit from the Books of Accounts of the assessee or the appellant wherein the appellant has shown the duty liability of service tax payable to the Department. As soon as the Department audit pointed out the short payment of duty, the appellant along with interest has paid the duty before the issue of show-cause notice. Further, the original authority after considering all the evidences has confirmed the duty along with interest and also appropriated the amount of duty and interest paid by the appellant but the original authority dropped the penalty under Section 76 and 78 by exercising their discretion under Section 80 after observing that there was no mens rea on the part of the appellant not to pay the service tax. Penalty u/s 76 and 78 of FA - HELD THAT:- Once the appellant has shown the duty liability in their Books of Accounts which clearly means that there was no suppression of material fact to evade the payment of tax and non-payment was on account of financial difficulties which has been proved by the assessee on record by producing sufficient documentary evidence - no penalty is imposable under Section 76 and 78 if there is a reasonable cause for not paying the service tax. Penalty u/s 77 is upheld - penalty u/s 76 and 78 set aside - appeal allowed in part.
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