2023 (9) TMI 572 - CESTAT KOLKATA

Levy of equal penalty u/s 78 of FA - delay in payment of service tax - delay in filing of returns - intent to evade service tax or not - suppression of facts or not - scope of SCN - HELD THAT:- The Notice was issued to the Appellant for a demand of Rs. amount of Rs.96,80,867/-,whereas the adjudicating authority has gone beyond the Notice and confirmed an amount of Rs.1,08,13,836/- - it is observed that even if an excess amount of service tax was admitted by the Appellant, the right course of action would be to issue a Corrigendum to the demand and include the excess amount to the Notice before confirmation. Thus, the confirmation of duty in excess of the demand made in the notice is not sustainable. Accordingly, the confirmation of Service Tax of Rs.96,80,867/- as demanded in the Notice is upheld.

Equal Penalty - HELD THAT:- The delay in payment was only due to financial crisis. In the show cause notice also there was no allegation of suppression of fact with intention to evade payment of service tax. Further, they stated that as they have paid the entire amount of service tax confirmed along with interest, they could have availed the SVLDRS Scheme, but could not do so due to illness and demise of one of the working partners. Accordingly, they requested for waiver of penalty under Section 80 of the Finance Act, 1994 - Notice only says that 'had the scrutiny of records not been conducted by the Audit, the nonpayment of service tax could have gone undetected'. There is no other evidence brought on record to allege suppression of fact on the part of the Appellant with an intention to evade payment of tax. Further, if the Appellant has any intention to evade payment of tax, they could not have declared more tax liability than what was demanded in the Notice, on their own volition - there is suppression of fact with an intention to evade payment of tax has been not established in this case. Accordingly, it is deemed a fit case to invoke the provisions of Section 80 of the Finance Act, 1994 and waive the penalty.

The demand of service tax of Rs.96,80,867/- along with interest as demanded in the Notice upheld - Penalty imposed under Section 78 of the Finance Act, 1994 is set aside by invoking the provisions of Section 80 of the Finance Act, 1994 - appeal disposed off.