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2015 (8) TMI 795 - CESTAT CHENNAI

2015 (8) TMI 795 - CESTAT CHENNAI - TMI - Penalty u/s 78 - Construction of Residential Complexes service - Failure to register under service tax - Held that:- It is the case where the appellants have already paid the entire demand along with interest and the same was appropriated in the OIO. The appellant contended that they have paid the entire duty and the interest before issue of show cause notice and pleaded for waiver of penalty. It is not the case of the appellants that they have voluntari .....

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ourts decisions where Section 78 penalty/under Section 11AC penalty were upheld, where there is a deliberate suppression of the facts proved with an intention to evade service tax. No justification on the appellant's plea for waiver of penalty imposed under Section 78 - Decision in the case of Kedia Business Centre Vs. CCE, Mumbai [2009 (3) TMI 85 - CESTAT MUMBAI] followed - Decided against assessee. - ST/01/2010 - Final Order No. 40448/2015 - Dated:- 17-3-2015 - R. Periasami, Member (T),J. For .....

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ted from their clients. Offence case was registered by Preventive Unit of Coimbatore Commissionerate and after completing investigation a show cause notice dated 27.02.2008 was issued to the appellant for demanding service tax of ₹ 5,91,192/- for the period 01.04.06 to 31.12.06 not paid under Construction of Residential Complexes. Appellants collected the entire amount and failed to remit the service tax to the Govt. account. The adjudicating authority in his order dated 30.12.2008 confirm .....

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the Act and upheld the demand and interest and penalty under Section 78 of the Finance Act. 3. Heard both sides. 4. Shri P.S. Krishnan, Sr. Manager of the Company appeared on behalf of the appellant submits on receipt of letter dated 20.07.2006 from the department they immediately took service tax registration and remitted the service tax long before issue of summons and show cause notice. He submits that the appellants are under bonafide belief that service tax is not payable and they never ha .....

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e reiterated the findings of the adjudicating authority and Commissioner (Appeals) and submits that the appellant has deliberately suppressed the facts of service tax already collected towards construction service. But for the detection by the Department the service tax evasion could not have been noticed as the appellants not taken any registration under service tax nor discharged any service tax. He further submits that the Commissioner (Appeals) has already waived the penalties under Section .....

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interest and the same was appropriated in the OIO. The appellant contended that they have paid the entire duty and the interest before issue of show cause notice and pleaded for waiver of penalty. It is not the case of the appellants that they have voluntarily paid the service tax on their own. As rightly held by the adjudicating authority in his findings, since the appellants have not even registered with the department under service tax and not filing returns in spite of knowing fully well th .....

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Hon'ble Tribunal in the case of Kedia Business Centre (supra), wherein the Tribunal by relying the Hon'ble Apex Court and Hon'ble High Court's orders upheld the penalty imposed under Section 78. The relevant portion is reproduced as under:- "2. The learned counsel has mainly argued that, as the service tax was paid with interest prior to the date of issue of the show-cause notice, any penalty was not liable to be imposed on the appellant under any of the above provisions. I .....

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f the Tribunal are to the effect that any penalty under Sections 76/77/78 of the Finance Act, 1994 is not imposable on a service-provider who paid service tax prior to issue of show-cause notice. The learned SDR has opposed the above argument of the counsel, on the strength of the Hon'ble Supreme Court's decision in UOI & Ors. v. Dharamendra Textile Processors & Ors. - 2008 (231) E.L.T. 3 (S.C.). He has also pointed out that the above argument of the learned counsel cannot be acc .....

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before issuance of show-cause notice. I find that, in the case of Dharamendra Textile Processors (supra), the Hon'ble Supreme Court held that penalty under Section 11AC of the Central Excise Act was mandatory. Following this ruling, the Court, in the case of Monarch Pipes Ltd., set aside the Tribunal's order [2007 (208) E.L.T. 470 (Tri.-Bang.)], wherein it had been held that penalty under Section 11AC of the Central Excise Act was not imposable where the assessee had already paid duty b .....

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