TMI Blog2013 (12) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... on without any supporting evidence. Section 73 provides for assessment of tax and thereafter, payment of tax. Demand under Section 73A does not require any assessment of tax at all. It deals with payment of tax to the exchequer if any amount has been collected in excess of the Service Tax assessed or determined. Even in a case where service is not available. If any amount has been collected, which is not required to be so collected, the Section provides for crediting of the amounts so collected to the exchequer. Thus, Section 73 and 73A deal with altogether different situations. Penalty under Section 76 is imposed for default in payment of tax and, no mens rea is required to be proved for imposing such penalty. For mere default and delay in payment of tax, the liability to penalty arises. As regards the penalty under Section 78, the same is attracted when Service Tax is demanded and confirmed invoking the extended period of time and short-levy or short-payment or non-levy or non-payment or erroneous refund is on account of fraud or collusion or willful mis-statement and suppression of facts and contravention of any of the provisions to chapter V of the Finance Act, 1994 or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice Tax liabilities and also an amount of Rs. 8,21,356/- deposited by them towards interest on delayed payment of Service Tax. The sad notice was adjudicated vide the impugned order wherein the Service Tax demand of Rs.1,46,88,455/- was confirmed along with interest thereon and the amounts already deposited were appropriated. Penalty at the rate of Rs.100/- per day from the date the tax is payable till the date it is paid was imposed under Section 76 of the Finance Act, 1994. A penalty of Rs.1,45,20,096/- each was imposed on the appellant firm as also on its Managing Director under the provisions of Section 78 of the Finance Act, 1994. In the impugned order, the learned adjudicating authority had also directed the appellant to furnish detailed calculation sheets to the Superintendent-in-charge of Service Tax for the verification of arithmetical mistakes alleged by the appellant in the computation of Service Tax demand. Aggrieved of the same, the appellants are before us. 3. The learned Counsel for the appellants made the following submissions:- (i) The impugned order is in grave error inasmuch as the same directed the Superintendent to re-quantify the Service Tax amount, af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the person liable to pay Service Tax' and no personal penalty can be imposed under this provision on any Director/employee of the assessee. (v) It is also argued that option to pay 25% of the penalty was not given by the adjudicating authority, which needs to be exercised now. 4. The learned Commissioner(AR) appearing for the Revenue reiterates the findings of the adjudicating authority and submits that in the present case, there was a deliberate mis-declaration on part of the assessee and there was short levy, and, therefore, the show-cause notice has rightly invoked the provisions of Section 73 and confirmed the demand under the said Section. It is also an admitted position that the appellant had deliberately mis-declared the value of taxable service in the ST-3 Returns and, therefore, imposition of penalty under Section 78 is justified. In view of the above, he prays for upholding the impugned order. 5. We have carefully considered the submissions made by both the sides. 5.1 As regards the contention that in the impugned order, the adjudicating authority had also directed the appellant to furnish a detailed calculation sheet to the Superintendent-in-charge of Service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argeable with the service tax or his agent, the provisions of this sub-section shall have effect, as if, for the words "eighteen months", the words "five years" had been substituted. Explanation. - Where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of eighteen months or five years, as the case may be." Section 73 A of the Finance Act,1994 provides for depositing Service Tax collected from any person with Central Government and reads as follows:- "(1) Any person who is liable to pay service tax under the provisions of this Chapter or the rules made thereunder, and has collected any amount in excess of the service tax assessed or determined and paid on any taxable service under the provisions of this Chapter or the rules made thereunder from the recipient of taxable service in any manner as representing service tax, shall forthwith pay the amount so collected to the credit of the Central Government. (2) Where any person who has collected any amount, which is not required to be collected, from any other person, in any manner as representing service tax, such person shall forthwi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of tax at all. It deals with payment of tax to the exchequer if any amount has been collected in excess of the Service Tax assessed or determined. Even in a case where service is not available. If any amount has been collected, which is not required to be so collected, the Section provides for crediting of the amounts so collected to the exchequer. Thus, Section 73 and 73A deal with altogether different situations. 5.3 In the case before us, the charge against the appellant is that the appellant has mis-declared the value of the services rendered and consideration received as evident from the show-cause notice, the relevant extracts of which is reproduced below:- Period Value of Security services received as declared in the ST-3 returns Security charges actually realized as per bank statements and Bill Registers Differential value of taxable Service not declared in the ST-3 Returns 2001-02 74,29,321 3,83,58,683 3,09,29,362 2002-03 1,61,32,197 4,35,39,856 2,74,07,659 2003-04 1,59,29,381 4,10,79,483 2,51,50,102 2004-05 No ST-3 returns filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, imposition of penalty under Section 78 on the appellant is in accordance with law. However, for the period after 10.5.2008, only penalty under Section 78 would be sustainable, as the provisions of Section 78 were amended w.e.f. 10.5.2008 that if the penalty is payable under Section 78, then the provisions of Section 76 shall not apply. Therefore, for the period prior to 10.5.2008 while provisions of both the Section 76 and 78 would apply, for the period on or after 10.5.2008, penalty under Section 78 alone shall apply. 5.6 The appellant has contended that imposition of penalty on the Managing Director under Section 78 is not sustainable in law. There is merit in this argument. Section 78 provides for penalty on the person liable to pay tax' and since the person liable to pay tax is the appellant firm and not the Managing Director, imposition of penalty on the Managing Director is not sustainable in law and accordingly, we set aside the same. 5.7 The last issue for consideration is whether the appellant is liable for the benefit of 25% of the penalty imposed under Section 78, if the tax, interest and the penalty is paid within 30 days from the date of receipt of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the first and the second proviso to Section 11AC, does not mean that the statue casts such an obligation on the adjudicating authorities. Therefore, if the adjudicating authority fails to make a reference in its order regarding the availability of paying 25% penalty, the assessee cannot agitate that there is violation of the statutory provisions contained in Section 11AC and it will not be open to the appellate authorities or the Courts to permit the assessee to pay 25% penalty beyond the time prescribed under Section 11AC. 24) The argument advanced on behalf of the assessee that the provisions of Section 11AC have to be read liberally cannot be accepted, because, Section 11AC imposes punishment to an assessee who has intended to evade duty by adopting any of the means mentioned therein. While punishing the persons who have sought to evade payment of duty, the legislature gives an incentive to pay lesser penalty provided the duty sought to be evaded with interest and 25% of the penalty is also paid within the time stipulated therein. The incentive in Section 11AC is intended to encourage payment of tax due to the revenue at the earliest without resorting to unwarranted li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as substituted with effect from 8th April 2011 does not support the case of the assessee because, even under those provisions the penalty imposable under Section 11AC is the penalty equal to the duty determined under Section 11A(10) i.e. 100% of the duty sought to be evaded and the incentive to pay lesser penalty is also given in those provisions subject to the conditions set out therein. Thus, under Section 11AC as substituted with effect from 12th May 2000 as also substituted with effect from 8th April 2011, the penalty mandatorily imposable is 100% of the duty sought to be evaded, but if the assessee pays the duty sought to be evaded with interest and penalty at the rates specified therein within the stipulated time, then, the balance penalty would not be payable. 27) Moreover, the third and the fourth proviso to Section 11AC make it further clear that, it is only when the duty determined as payable under Section 11A(2) is increased by the appellate authority or the Court as the case maybe, then, the twenty five per cent of the increased penalty has to be paid within thirty days of the communication of the order by which such increase in the duty take effect. Thus, the app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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