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2017 (12) TMI 1672 - SETTLEMENT COMMISSION, CUSTOMS, CENTRAL EXCISE AND SERVICE TAX, CHENNAIReduced rate of interest - Non-payment of service tax - Real Estate Agent’s service - allegation based on investigation initiated by the officers of DGCEI, Hyderabad Zonal Unit - Held that:- The applicant in his settlement application admitted the entire service tax liability of ₹ 22,53,449/- and paid the same along with interest amounting to ₹ 13,02,901/- - With regard to payment of interest, the Bench observes that the department has not accepted the applicant’s plea for reduced rate of interest on the ground that out of the 5 years period (2011-12 to 2015-16) covered in the notice, applicant’s taxable turnover exceeded rupees sixty lakhs during the year 2013-14, thus making him ineligible for reduced rate of interest at 3% for determination of interest liability. The Bench observes that in the Finance Act, 2011, the rate of interest leviable under Section 75 of the Finance Act, 1994 for delayed payment of service tax was increased from 13% to 18%. However vide proviso to Section 75 with effect from 8-4-2011, relief in the form of reduction of 3% interest rate was provided to small service providers whose value of taxable services did not exceed 60 lakh rupees in a financial year - The Bench observes that the wordings “does not exceed sixty lakh rupees during any financial year” clearly conveys the meaning that the taxable turnover of a service provider should not exceed 60 lakh rupees in all the financial years covered in the notice to be eligible for the benefit of reduced interest rate. Hence the Bench is in agreement with the department’s stand on the issue and holds that the applicant is not entitled to the benefit of reduced rate of interest inasmuch as out of the impugned period covered in the notice i.e. 2011-12 to 2015-16, applicant’s turnover had exceeded 60 lakh rupees during the financial year 2013-14. The actual interest liability on the service tax works out to ₹ 13,02,901/- which was also admitted and paid by the applicant at the time of filing Settlement Application. Hence, the Bench holds that the claim for reduced rate of interest made subsequently vide their letter dated 16-6-2017 is without any merits and therefore rejects the same. Penalty - Held that:- The Bench notes that the applicant had not taken Service Tax Registration and was also not filing ST3 returns during the relevant period and they filed the statutory returns subsequently along with late fee. Non-registration and non-filing of the ST3 returns by the applicant would lead to the conclusion that they have concealed the liability before the assessing authorities and the Bench holds that the applicant is liable for penalty - The Bench also notes that the applicant has made a true and full disclosure of their liability - considering the co-operation extended during the course of proceedings, the Bench is inclined to grant partial immunity from penalty to the applicant. Prosecution - Held that:- The Bench considers it a fit case for grant of immunity from prosecution to the applicant.
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