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2018 (9) TMI 825 - AT - Service TaxPenalties - payment of service tax with interest before issuance of SCN - whether in the given facts of the case, the appellants can be extended the beneficial provision of Section 80 of the Act so as to waive the penalties imposed on them under Section 76 and 77 ibid? - Held that:- In the impugned order, a clear chit has been given to the appellant that there was no mala fide intention on their part and that proviso to Section 73(1) of the Act has been invoked without any evidence. As the Department has not come in appeal against this finding of the Commissioner and subsequent decision not to impose penalty under Section 78 ibid., it would only be presumed that the Department has accepted the impugned order in toto, including the said findings - Once it has been held that service tax has not been paid on account of fraud or collusion or wilful misstatement or suppression of facts, etc., with intention to evade payment of service tax, the provisions of Section 73(3) of the Act would hold sway in the case of the appellant and, in fact, as per the provisions of that Section, on the basis of tax ascertained by the Department Officer, if the amount is paid up by the appellant before service of a notice on him, there shall not be served any notice under Sub-section 1 of Section 73 ibid. Once no notice was required to be issued, there would be no question of imposition of any penalties on the appellant. The appellant has paid up the service tax belatedly before issuance of SCN. The interest which is in the nature of compensation for the delay in payment, was also paid after issuance of SCN and much before issuing the Order-in-Original. The conduct of the appellant in paying up service tax and interest, and the categoric finding of the Commissioner that there is no intention to evade tax, persuades us to hold that appellant has established reasonable cause for invoking Section 80 of the Act ibid - the penalty imposed under Section 76 requires to be set aside - demand of tax with interest upheld. Appeal allowed in part.
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