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2009 (8) TMI 289

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..... /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-imposition of penalty under Sections 76, 77and 78 – Penalty set aside - ST/505/2008 - 1094/2009, - Dated:- 6-8-2009 - S/Shri M.V. Ravindran, Member (J) and P. Karthikeyan, Member (T) Shri Pradyumna G.H., Advocate, for the Appellant. Shri V. Raja Ram, JDR, for the Respondent. [Order per: M.V. Ravindran, Member (J)]. - This Appeal is directed against the Order-in-Original No. 41/2008 .....

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..... ating 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 that they are challenging only penalty imposed under Sections 76, 77 and 78 of the Act. He submits that during the period from April 2004 to December 2006, the appellant had discharged the service tax liability promptly to the tune of Rs. 1,64,21,830/-. He submits that the delay in discharging the tax liability in the impugned period, was due to severe financial crunch. He .....

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..... 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 failed to discharge the service tax though he had collected the same from the customers. The appellant s representative had explained in his statement that the delay in deposit of service tax was due to the financial crunch which arose on account of non-release of payment from one of their major clients, but discharged the tax liability along with interest thereon on 5-7-2007 .....

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..... levant 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 such person to whom SCN is issued under sub-section (1) of Section 73. Therefore, it is not merely a conclusion under sub-section (1), but conclusion of all proceeding against such person. Similar is the position in respect of sub-section (3) of Section 73. 4. Accordingly, conclusion of proceeding in terms of sub-section (1A) and (3) of Section 73 implies conclusion of entir .....

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..... rcised 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 the order of the Original Authority. The ratio of the aforesaid decision has been followed by this Bench in many of subsequent decisions. Accordingly, we find that the appellants have made out a prima fade case in their favour for non-imposition of penalty under Sections 76, 77and 78 of the Act. 7. In view of the foregoing reasons, respectfully following the decision of th .....

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