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2022 (10) TMI 582 - AT - Service TaxLevy of penalty u/s 77 and 78 of the Finance Act - goods transport agency service - short payment of service tax - service tax along with interest paid on being pointed out by the department - deliberate suppression of facts or not - HELD THAT:- It can be seen that the department has to refrain from issuing Show Cause Notice if the appellant pays up the service tax along with interest as ascertained by himself or by the officers - In the present case, the appellant has paid up the service tax along with interest on 4.5.2012 and 16.8.2012. The Show Cause Notice was issued only on 22.10.2012. The learned AR has submitted that there is deliberate suppression of facts and therefore the Show Cause Notice issued and the penalties imposed are proper. It can be seen that the appellant on being pointed out has paid the service tax immediately. It is also seen that they have paid 1% penalty in case the matter falls under sec. 73(4A) of Finance Act, 1994. The conduct of the appellant pursuant to the verification of accounts shows that they had the intention to pay up the service tax. Further, the payment of service tax on GTA service during the relevant period was under litigation before various forums and there were conflicting decisions. It is also argued that the entire issue is a revenue neutral as they would be eligible to take credit of the service tax being tax paid on input services. Taking note of these submissions that there is no deliberate suppression of facts. On such score, sub-section (3) of section 73 would apply. The decision of the Hon'ble High Court of Karnataka in the case of COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX VERSUS M/S ADECCO FLEXIONE WORKFORCE SOLUTIONS LTD [2011 (9) TMI 114 - KARNATAKA HIGH COURT] has held that no penalty can be imposed under sub-section (3) of section 73 of Finance Act, 1994. The penalties imposed under sections 77 and 78 are not legal and proper and requires to be set aside - Appeal allowed - decided in favor of appellant.
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