TMI Blog2012 (6) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice cannot be sustained. penalty imposed under Section 78 of the Finance Act set aside Penalty under Section 77 of the Finance Act - assessees misrepresented facts in the ST-3 returns filed by them – Held that:- Section 77 as it stood during the material period provided for a penalty for those who failed to file return. The provision did not contemplate any penalty on any person for misrepresentation of facts in the return filed by him. Therefore, the proposal raised in the relevant show-cause notices and the decision taken by the learned Commissioner under Section 77 of the Finance Act, 1994 are both unsustainable. The penalties imposed on the appellants under Section 77 set aside. appeals are disposed of - ST/256/2008 and ST/7 & 68/2009 - A/196-198/2011-WZB/C-I(CSTB) - Dated:- 28-4-2011 - S/Shri P.G. Chacko, Sahab Singh, JJ. Shri Prasad Paranjape, Advocate, for the Appellant. S/Shri P.K. Agarwal and R.K. Mahajan, Jt. CDR, for the Respondent. [Order per : P.G. Chacko, Member (J)]. These appeals filed by the assessees are directed against three orders of the Commissioner of Central Excise, Aurangabad. The learned Commissioner confirmed demands of service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial concern except to the aforenamed sugar factory. It is not in dispute that it was the appellant who supplied sugarcane to the sugar factory. The sugarcane was harvested from the sugarcane fields of growers who were also members of M/s. Kopargaon SSK Ltd. The harvested sugarcane was transported and supplied to the sugar factory by the appellant, for which the sugar factory paid a monetary consideration to the appellant on the basis of the bill raised by the latter. A copy of the worksheet supplied by the Assistant Manager of the appellant-company in the context of giving the aforesaid statement under Section 14 of the Central Excise Act is also available on record. The service tax amount estimated by the Assistant Manager himself and mentioned in his statement was subsequently paid by the appellant albeit 'under protest'. The relevant show-cause notice was issued later on 21-4-2008 to appropriate the above payment towards demand of service tax. The show-cause notice also demanded interest on tax under Section 75 of the Finance Act, 1994. Penalties were proposed under Sections 77 78 of the Act. In reply to this show-cause notice, the appellant submitted that they were no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 83 of the Finance Act, 1994. It is submitted that, in the absence of challenge to the demand of service tax, the above documents are unnecessary. 5. We have considered the submissions. In each appeal, the appellant has filed application for bringing on record similar additional documents the nature of which has already been indicated by us. In the wake of the above objection raised by the learned JCDR, we have perused the grounds of each appeal. There is no reference to tax liability in the grounds of appeal except in Ground No. 1, which states that the Commissioner erred in confirming the demand of service tax . How did the Commissioner erred in confirming the demand of service tax? There is no answer to this crucial question anywhere in the grounds of appeal. It is also pertinent to note that, in Appeal No. ST/256/2008, the appellant has stated that there is no fraud, collusion, wilful misstatement or suppression of facts as stated under Section 78 of the Finance Act, 71994. Apparently, this statement has been made in the context of challenging the penalty imposed on the appellant under Section 78 of the Finance Act, 1994. There are also averments in the nature of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot hold ground. 10. We have already held that the demand of service tax is not under any serious challenge in any of these appeals. The only remaining questions relate to interest liability and penal liability. 11. The learned Commissioner directed the appellants to pay interest under Section 75 of the Finance Act, 1994. According to the appellants, they are not liable to pay such interest inasmuch as the service tax was paid prior to issue of the show-cause notices. The learned counsel has not cited any judicial authority in support of this ground raised by the appellants. Admittedly, in these cases, the service tax. amounts were paid belatedly and, that too, when the default was noticed by the department. It is settled law, today, that interest is payable on any amount of duty or other tax belatedly paid. In respect of service tax,, this interest has to be paid under Section 75 of the Finance Act, 1994. The Commissioner's decision on this count has to be sustained. 12. As regards penalty under Section 78 of the Finance Act, 1994, again, the contention. of the appellant is that they have no penal liability as the amount of service tax was paid before the issuance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d hence proviso to Section 73(1) of the Finance Act, 1994 can be correctly invoked in this case . It thus appears, the allegation of suppression of facts was raised in the show-cause notice for the sole purpose of invoking the proviso to Section 73(1) of the Finance Act, 1994 and not for any other purpose. As a matter of fact, it was not necessary for the department to invoke the proviso to Section 73(1) ibid for demanding service tax from the assessee for the aforesaid period, which is within the normal period of limitation prescribed under Section 73(1). In this scenario, the ;penalty imposed by the Commissioner under Section 78 of the Finance Act, 1994 on the assessee on the ground of suppression of taxable value of the service cannot be sustained. We, therefore, set aside the penalty imposed under Section 78 of the Finance Act, 1994 on the appellant in Appeal No. ST/68/2009. 14. Yet another penalty imposed by the learned Commissioner on the assessees is one under Section 77 of the Finance Act, 1994. Penalties of ₹ 5,000/- each. have been imposed under this provision of law. The reason stated for this penalty is that the assessees misrepresented facts in the ST-3 re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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