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2015 (12) TMI 1110 - CESTAT BANGALORE

2015 (12) TMI 1110 - CESTAT BANGALORE - TMI - Levy of penalty for delayed filing of ST-3 return - Levy Penalty u/s 77 & 78 for default in payment of service tax - Manpower supply service - Held that:- In respect of the appellant assessee, where service of supply of manpower had come under the tax net about three months back and where the service recipient was a 100% EOU registered with Cochin Special Economic Zone leading them to believe that liability of service tax was not payable by them and .....

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had delayed the filing of their half-yearly return contravening the relevant provisions of law of Service Tax. This penalty of ₹ 4000/- imposed under Section 70 of the Finance Act, 1994 on the appellant assessee does not deserve to be set aside - Decided in favour of assessee. - ST/1401/2012-SM - Final Order No.22131 / 2015 - Dated:- 1-12-2015 - Shri Ashok K. Arya, Technical Member For the Petitioner : Shri N. Anand, Advocate For the Respondent : Shri Ajay Saxena, Commissioner(AR) ORDER Pe .....

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e recipient viz. M/s. Primacy Industries (P) Ltd., Mangalore was dated 06/09/2005 and they started supplying the said service with effect from 06/09/2005 only. He states that as this service had come under the Service Tax net only about 3 months back then the legal position was not clear and subsequently it was claimed by their service recipient M/s. Primacy Industries (P) Ltd., Mangalore that they were 100% EOU registered under the Cochin Special Economic Zone, they are exempted from payment of .....

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being provided to a 100% EOU, the said liability was honoured and service tax along with interest was immediately paid i.e. on 28/11/2006. He points out that however Department issued them a show-cause notice, inter-alia, for imposition of penalties under different sections of the Finance Act, 1994 though provisions of Section 73(3) of Finance Act, 1994 say that in case of erroneous, non-levy or short-payment, show-cause notice is not to be issued. The learned advocate for the appellant pleads .....

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hen their service recipient was a 100% EOU registered under Cochin Special Economic Zone, there was bona fide belief that there was no service tax to be levied on the service of supply of manpower to the client M/s. Primacy Industries (P) Ltd., Mangalore. He consequently pleads that no penalty under Sections 77 & 78 or otherwise is imposable on the appellant assessee. In this regard he also cites various decisions of the courts given below:- a. CST, Bangalore Vs. Master Kleen [2012(25) STR 4 .....

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gh Court s decision in the case of CST, Bangalore Vs. Motor World (supra), learned advocate argues that there have been enough reasonable causes in their case for failure to pay service tax. Therefore considering the provisions of Section 80, no penalty is imposable on them. 3.4. Learned advocate however accepts the appellant s liability of payment of service tax along with interest; he also says that though it was paid quite delayedly, there cannot be any escape on any ground for them to escape .....

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