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2009 (8) TMI 289

..... es on verification of the records - The period involved in this case is from January 2007 to June 2007 – Appellant submits that the delay in discharging the tax liability in the impugned period, was due to severe financial crunch. He submits that the Board’s Circular No. 137/167/2006-CX-4, dated 3-10-2007 would squarely cover the issue in favour of the appellant - Circular No. 137/167/2006-CX-4 clarifying that SCN not to be issued when service tax paid with interest and proceedings deemed as concluded – Tribunal in similar situation in Vee Aar Secure v. Commissioner of Service Tax, Bangalore [2009 - TMI - 32930 - CESTAT, BANGALORE], set aside the penalty - we find that the appellants have made out a prima fade case in their favour for non-i .....

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..... no intention to evade payment of service tax but there was sufficient cause for non-deposit of the tax liability. The appellant claimed remedies under Section 73(3) of the Act. The adjudicating authority after considering the submissions made, confirmed the demand of service tax, also demand of interest and appropriated the amounts towards the tax and interest. The adjudicating authority also imposed penalty of Rs. 200/- per day under Section 76; penalty of Rs. 1000/- under Section 77 and equivalent penalty under Section 78 of the Finance Act, 1994. Aggrieved by such an order, the appellant is in appeal before us. 3. The learned Counsel submits that they are not challenging the confirmation of demand of service tax and interest. He submits .....

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..... returns attract the penal provisions of Sections 76, 77 & 78 of the Act. It is the submission that the subsequent payment of tax was only after the investigation undertaken by the department and it would prove that there is an existence of intention to evade payment of service tax. Hence the imposition of penalty under Sections 76, 77 & 78 of the Finance Act, 1994 is correct and proper. 5. We have considered the submissions made by both sides and perused the records. We find that there is no dispute that the appellant had been discharging the service tax liability on the services rendered by him during the period from January 2004 to December 2006. During the relevant period i.e. from January 2007 to June 2007, the appellant had fai .....

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..... . The intention of Section 73(1A) has already been explained vide para 8(g) of the post budget instructions issued by TRU vide D.O.F. No. 334/4/2006-TRU, dated 28-2-2006 [2006 (4) S.T.R. C30], wherein it has been clarified that this sub section provides for conclusion of adjudication proceedings in respect of person who has voluntarily deposited the service tax. 3.1 The relevant portion of Section 73 is reproduced below: Provided further that where such person has paid service tax in full together with interest and penalty under sub-section (1A), the proceeding in respect of such person and other person to whom notices are served under sub-section (1) shall be deemed to be concluded. Thus, law prescribes conclusion of proceedings against su .....

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..... how cause notice when the assessee pays the service tax liability immediately after it is pointed out. These situations had been examined by this tribunal in the case of M/s. Majestic Mobikes Pvt. Ltd. & Ors. [Final Order No. 652 to 672/2008 dated 30th May 2008] [2008 (11) S.T.R. 609 (Tribunal) arid the tribunal had given a finding that where the original authority exercised his powers under Section 80 of the Finance Ad, after recording proper reasons, it cannot be reopened to enhance the penalty by the Commissioner in the Order-in-Revision. The present situation in the appeal is clearly covered by aforesaid decision. In view of this, we are of the view that the impugned Order-in-Revision has no merit. We set aside the same and restore .....

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