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2021 (2) TMI 6 - AT - Service TaxLevy of personal penalty - Levy of penalty of ₹ 1 Lakh each on the Managing Director as well as Chief Financial Officer under Section 78A of the Finance Act, 1944 - allegation is that Chief Financial Officer of the company and Managing Director both were well aware of the fact of service tax charged and collected in full but not paid to the Government Account - HELD THAT:- During the pendency of these three appeals, the company as well as the Managing Director and the Chief Financial Officer applied under the Sabka Vishwas Legal Dispute Resolution Scheme but only the application filed by the company was cleared by the Department and Discharge Certificate was issued and accordingly the appeal of the company is dismissed as withdrawn but the applications filed by the individuals were rejected. Further, on merit also, there are no material which was considered by both the authorities below while imposing the penalties on these two officers under Section 78A of the Finance Act. The only ground on which both the authorities have imposed penalties is that these officers were negligent whereas there are no material to substantiate that allegation against these officers. These officers have merely complied with the agreement entered into between the parties and no knowledge can be imputed on them that they have deliberately violated the provisions of the Act. In the case of HINDUSTAN STEEL LIMITED VERSUS STATE OF ORISSA [1969 (8) TMI 31 - SUPREME COURT], wherein it was held that penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of it obligation - Further, in the SCN also, it has not been established that these individuals have acted in contumacious manner so as to impose penalty. The imposition of penalty on the appellants is not justified - appeal allowed - decided in favor of appellant.
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