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2019 (1) TMI 778 - AT - Service TaxPenalty u/s 76 and 78 of FA - short-payment of service tax - Business Support Service - suppression of facts - Held that:- From the facts on records as well as the submissions made, it is seen that the assessee has discharged the service tax along with interest. The show cause notices have been issued invoking sections 73 and 73A of the Finance Act, 1994. As per Section 73A, the assessee is duty bound to deposit the amount collected as service tax with the Central Government. However, the said section does not provide for imposition of penalty for non-failure to comply with the said provision. The show cause notices have invoked section 73 also. The contention of the department that there is suppression of facts with intention to evade payment of service tax is not supported with any evidence. For these reasons, there are no grounds to impose penalty under section 78 - there are no ingredients to impose penalty under section 78. The appellants have established that the delay in payment of service tax was due to the default of one of the clients and consequent financial hardships. They have given reasonable cause for failure and we hold that it is a fit case for invocation of Section 80 to set aside the penalties. The penalty imposed under sections 76 and 78 in these appeals cannot sustain - impugned orders are modified to the extent of setting aside the penalties imposed under sections 76 and 78 of Finance Act, 1994 without disturbing the demand or interest thereon - appeal allowed in part.
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