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2022 (12) TMI 1191 - AT - Service TaxLevy of penalty - discharge of entire service tax liability prior to the issuance of any show cause notice and the appellant - reverse charge basis in respect of business auxiliary services received from abroad - HELD THAT:- If Commissioner (Appeals) is correct in his observation “As mentioned in the Show Cause Notice. was only after verification of the details submitted by the Appellants, the short payment of Service Tax liability was detected, which otherwise would have gone undetected which takes the colour of malafide intent and not a voluntary payment”, then penalty should have been imposed under Section 78 of the Finance Act, 1994. Hon’ble Supreme Court has in the case of UNION OF INDIA VERSUS M/S RAJASTHAN SPINNING & WEAVING MILLS AND COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE VERSUS M/S. LANCO INDUSTRIES LTD. [2009 (5) TMI 15 - SUPREME COURT] specifically held that if the ingredients for invocation of extended period are present, then mandatory penalty as provided under Section 11AC of the Central Excise Act, 1944 (corresponding to Section 78 of the Finance Act, 1994) should have been imposed. Section 78 also provides that if the penalty under Section 78 is imposed, no other penalty under Section 76 could have been imposed on the appellant. Accordingly the contention raised by the learned AR that there was malafide intention to evade payment of duty cannot be upheld. Secondly, Section 73(3) clearly provides that payment of tax could have been on own violation or on being pointed out by the department. Then also no notice could have been issued. Appeal allowed.
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