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2018 (5) TMI 223 - HC - Service TaxNon-issuance of SCN - Oral intimation of tax liability during audit - payment of tax under protest - It is the grievance of the petitioner that no SCN was issued to the petitioner despite petitioner requesting the respondents to issue the same - Banking and other Financial Services - Held that: - Much emphasis is placed on Section 73[3] of the Act and clause 3.2 of the Circular dated 18.08.2015 by the Revenue, to contend that no show cause notice is necessary when the petitioner has paid the tax and penalty on the basis of tax ascertained by the Audit Enquiry Officer before service of notice under sub- section [1] of Section 73 of the Act. As narrated above in the preceding paragraphs, the petitioner has made clear that the amount paid was provisional and under protest. No waiver of show cause notice has been accepted. As such limitation for the extended period is not invokable unless show cause notice puts the Assessee to notice specifically as to various commissions/omissions stated in the proviso to Section 73[1] of the Act had been committed. Extended period of limitation of five years is available only in cases where the omissions or commissions enumerated in proviso to Section 73[1] are alleged. Section 73[4] further makes it clear that clauses enumerated in the proviso to Section 73[1] would not fall within the ambit of section 73[3]. Thus, tax, interest and penalty cannot be collected for five years period without alleging omission/commission of the clauses enumerated under the proviso to Section 73[1]. Explanation – 2 to Section 73[3] provides that no penalty under any of the provisions of the Act or the rules made thereunder shall be imposed in respect of payment of service tax under section 73[3] and interest thereon. Even assuming Section 73[3] is invoked by the revenue, no penalty can be leviable. Otherwise also, if Section 78[1] is invoked, show cause notice is mandatory. It is well settled legal principle that penalty is not automatic. If the Assessee is making payment within 30 days after issuance of show cause notice, the penalty prescribed is 15% of such service tax, opportunity to show cause cannot be denied to the petitioner who is disputing the liability to tax extending the period of limitation. SCN is necessary for determining the disputed tax, interest and penalty - matter is remitted to the Respondent No.2 to issue show cause notice to the petitioner to determine the disputed tax, interest and penalty in accordance with the provisions of the Act - petition allowed.
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