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2015 (9) TMI 477 - CESTAT AHMEDABAD

2015 (9) TMI 477 - CESTAT AHMEDABAD - TMI - Levy of penalty - service tax and interest were paid before issue of show cause notice - scope of section 73(3) - Held that:- it is seen that the matter is no more res-integra. The Division Bench of the Karnataka High Court in the case of CCE & ST, LTU, Bangalore vs. Adecco Flexione Workforce Solutions Limited [2011 (9) TMI 114 - KARNATAKA HIGH COURT], had held that assessee is not liable to pay any penalty under such circumstances - Levy of penalty u/ .....

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ee barges and two tugs and were engaged in providing these barges and tugs on hire basis to various customers. Subsequently, a show cause notice F. No. DGCEI/AZU/36-88/2011-12/4020 dated 22.11.2011 was issued to the appellants on the ground that the appellants have not paid appropriate service tax in time. The adjudicating authority vide OIO dated 31.01.2013 confirmed the demand of service tax of ₹ 30,93,660/- and appropriated the amount of ₹ 21,84,494/- already by them. He also conf .....

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2. Heard both the parties. Learned Chartered Accountant appearing for the appellants submitted at the outset itself that they are contesting the imposition of penalty only and they have never questioned the liability of the appellants to pay service tax, right from the beginning. He submits that though there was no clarity and there was confusion regarding taxability of the services under the category of Supply of Tangible Goods , which was first introduced with effect from 16.5.2008, the appell .....

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o intention to evade tax and that they had admitted/ declared their liability in the six monthly returns, Profit and Loss accounts and balance sheets. He drew attention of the bench to the initial statement of Shri Jumma G. Sati, partner of the appellants recorded on 05.08.2011. He emphasized the relevant portion of the statement, reproduced at para 4.5 of the show cause notice dated 22.11.2011 which reads as follows:- 4.5 On being asked whether service tax was paid from time to time, he stated .....

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1 April 2009 to June 2009 1,24,735/- 3,744/- 26,678/- 5. 31.03.2011 July 2009 to Sept. 2009 4,000/- 120/-475/- 6. 04.07.2011 Oct. 2009 to Dec 2009 1,251/- 38/- 207/- 7. 31.03.2011 Jan 2010 to March 2010 37,930/- 1,137/- 5,079/- 8. 04.07.2011 April 2010 to June 2010 1,42,318/- 4,270/- 13,992/- 9. 04.07.2011 July 2010 to Sep 2010 2,68,777/- 8,064/- 17,452/- 10. 03.08.2011 Oct. 2010 to Dec 2010 3,76,127/-11,285/-25,389/- 11. 03.08.2011 Jan 2011 to March 2011 8,10,000/-24,301/-26,646/- Total 21,20,8 .....

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djudicating authority. He also submitted that another amount of ₹ 2,38,607/- which was refund sanctioned to the Appellants were also appropriated by the Revenue vide order F.No. V/18-27/ST/REF/2013-14 dated 03.07.2013 of Assistant Commissioner of Service Tax, Rajkot (Copy filed with Appeal Memorandum). He also submitted that the appellants had also paid ₹ 1,11,988/- vide challan No. 00438 dated 13.08.2015 (copy submitted). It is his submission that there was no intention to evade pay .....

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refund has erroneously been made, may pay the amount of such service tax, chargeable or erroneously refunded, on the basis of his own ascertainment thereof, or on the basis of tax ascertained by a Central Excise Officer before service of notice on him under sub-section (1) in respect of such service tax, and inform the [Central Excise Officer] of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the amount so paid : Provi .....

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is hereby declared that the interest under section 75 shall be payable on the amount paid by the person under this sub-section and also on the amount of short payment of service tax or erroneously refunded service tax, if any, as may be determined by the [Central Excise Officer], but for this sub-section. [Explanation 2. Fro the removal of doubts, it is hereby declared that no penalty under any of the provisions of this Act or the rules made there under shall be imposed in respect of payment of .....

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ssions made by both sides, it is seen that the matter is no more res-integra. The Division Bench of the Karnataka High Court in the case of CCE & ST, LTU, Bangalore vs. Adecco Flexione Workforce Solutions Limited 2012 (26) STR 3 (Kar), had held that assessee is not liable to pay any penalty under such circumstances. For better appreciation, relevant portion of the said decision is reproduced below:- 2. Facts are not in dispute. The assessee has paid both the service tax and interest for dela .....

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rity as well as the appellate authority seem to think. If an assessee does not pay the tax within the stipulated time and regularly pays tax after the due date with interest. It is something which is not pardonable in law. Though the law does not say so, authorities working under the law seem to think otherwise and thus they are wasting that valuable time in proceeding against persons who are paying service tax with interest promptly. They are paid salary to act in accordance with law and to ini .....

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