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2023 (2) TMI 897 - AT - Service TaxLevy of fine and penalty - Issuance of SCN under proviso to Section 73(1) of FA - service tax along with interest is paid before the issue of Show Cause Notice - intent to evade tax present or not - CBEC Circular F. No. 137/167/2006-CX dated 3.10.2007 - HELD THAT:- It has been held by courts that appellate bodies should be mindful of the first-hand knowledge of the original authority and the position that he holds to assess the facts and the credibility of circumstances from his own observations. Even if a superior appellate body feels that another view is possible, that is no ground for substitution of the original authorities view with one’s own by exercising its appellate jurisdiction. The exception would be if the impugned order is demonstrably found as not being rational or reasonable or is suffering from procedural impropriety. Which is not the case here. In the circumstances, the show cause notice having been issued invoking the extended time limit under proviso to section 73 (1) of the Finance Act 1994 and the imposition of penalty cannot be said to be unwarranted. In the instant case where suppression of facts has been alleged in the Show Cause Notice, the appellant has not paid the reduced penalty as is required by law along with tax and interest, however the same facility has still been extended to them by the original authority in the impugned order. Further with regard to the judgements cited by the appellant against the imposition of penalty, it is felt that each case has to be seen from the facts and circumstances that prevail. In its decision in M/S ONWARD E-SERVICES LTD. VERSUS COMMISSIONER OF SERVICE TAX, MUMBAI-II [2018 (5) TMI 323 - CESTAT MUMBAI], the Tribunal noted that the assessee had correctly declared the value in the ST-3 returns filed by them and had not suppressed any facts unlike the present case were no ST-3 Returns were filed for the relevant period on time. In the case of COSMIC DYE CHEMICAL VERSUS COLLECTOR OF CENTRAL EXCISE, BOMBAY [1994 (9) TMI 86 - SUPREME COURT], the Hon’ble Supreme Court noted that it was a case where the goods were thought to be exempt from duty, whereas in the instant matter the taxability of the service during the relevant period is not under challenge. The judgements cited are hence not relevant in the appellant’s case. In the circumstances, undue sympathy to impose an adequate penalty would undermine the efficacy of law and encourage other tax payers to avoid paying taxes on time while waiting for if and until they have been found to have evaded duty by the department to pay their taxes - appeal dismissed.
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