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2018 (8) TMI 825 - HC - Service TaxPenalty u/s 78 of the Finance Act, 1994 - service tax was being paid on the net amount received by the respondent that is on the invoice price minus TDS amount withheld by the client - case of Revenue is that the instant case was not one of simple omission or failure, but there was wilful suppression of fact - Held that:- As per Section 67 of the Finance Act, 1994, service tax is payable on the gross amount of value service rendered and service tax is payable once the amount billed is realized. But for the investigation, the non payment of service tax would have gone unnoticed. The amount received from the client would include the entire service tax which has been calculated from the customer and it should have been paid to the department. The TDS amount with held cannot be said to include the service tax component - the respondent has received the service tax and has not passed on it to the department. The invoice that is raised would contain the amount payable towards service Tax. The respondent therefore has clearly manipulated their accounts and paid lesser service tax even though they have recovered the entire portion of service tax from the client. The respondent cannot take shelter under a faulty programme when they themselves handled in the system. The service tax could not have been calculated on the basis of the amount received from the clients minus TDS. The respondent is liable to pay penalty. Section 80 of the Finance Act,1994, cannot be invoked - appeal allowed - decided in favor of Revenue.
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