2023 (9) TMI 521 - CESTAT AHMEDABAD

Invocation of extended period of limitation - levy of penalty u/s 78 of FA - Suppression of facts or not - Construction Service (Painting) declared correctly or not - correct availment of benefit of N/N. 1/2006-ST or not - HELD THAT:- The appellant has regularly been filing ST-3 returns - the appellant have regularly being declaring their service activity correctly in the return. They have also been claiming the benefit of Notification No. 1/2006-ST dated 01.03.2006. The amount of taxable value for the service tax has also been declared by them correctly after availing abatement as per Notification No. 1/2006-ST.

From the scanned copies of ST-3 returns, it can be seen that the appellant have correctly classified the taxable service mentioning “Construction Service (Painting)”. They have also declared abatement under Notification No. 1/2006-ST. - there is no element of the misrepresentation or suppression of facts with an intent to evade payment of service tax and therefore the demand of service tax under the extended time proviso under Section 73(1) of Finance Act, 1994, set aside.

Penalty u/s 78 of FA - HELD THAT:- Since the elements of fraud, mis-statement or suppression of facts etc. with an intent to evade service tax are not present in the matter therefore, the penalty under Section 78 of the Finance Act, 1994 is not imposable in this case. Accordingly, the penalty imposed in the impugned order-in-original under Section 78 of the Finance Act, 1994 against the appellant is set-aside.

The demand for the extended time proviso under Section 73 of the Finance Act, 1994 set aside - The demand for the normal period is confirmed. The appeal is partly allowed.