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2016 (11) TMI 282 - CESTAT MUMBAIImposition of penalty u/s 78 - receipt of commission for arranging supply of refractories to the clients - business auxiliary service - Held that: - The determination of tax liability was a consequence of routine scrutiny of service tax returns followed by summons of the balance sheet of the appellant. From this it can be inferred that there was no attempt at subterfuge or suppression. Moreover, the promptitude with which the determined tax liability was deposited along with interest reinforces the inference. Though the first appellate authority has pointed out to the lack of any evidence of non-collection of tax from their customers, we cannot accept that assertion to be tenable. It is a matter of record that the non-payment of tax was discovered upon scrutiny of balance sheet; there is no earthly reason to presume that the tax component of the transaction was suppressed when the transaction itself is recorded in the financials. Indeed, there is no allegation of any failure to remit. In these circumstances, we find no reason not to accept the submission that the tax-liability should be computed on ‘cum-tax’ basis - the commission received shall be subject to ‘cum-tax’ method of computation of taxable value - penalty u/s 78 set aside - appeal allowed - decided in favor of appellant.
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