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2016 (3) TMI 307 - CESTAT MUMBAI

2016 (3) TMI 307 - CESTAT MUMBAI - TMI - Liability to pay penalty under Section 78 of the Finance Act, 1994 - where service tax and interest has been paid - revenue neutral exercise - Held that:- there cannot be any wilful intention to evade service tax because had the appellant knew that they are liable to pay, then they would have paid and claimed cenvat credit being manufacturer and it would have been a revenue neutral situation. Also the appellant paid the service tax - Therefore by relying .....

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ended period of limitation - Intention to evade payment of Service tax - Held that:- when the appellant can take credit and utilize it further for the payment of tax, naturally they would not get any benefit by not paying such a tax and attract penal provisions of the law, so, there can not be any intention to evade tax. Therefore, as the appellant peis not disputing the liability to tax and they have paid the service tax along with interest uptodate, therefore extended period of limitation cann .....

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d in the manufacture of various goods falling under Chapter 28 and 29 of the Central Excise Tariff Act, 1985. During the month of January and February 2008, audit was conducted from the records maintained by the appellant and during the audit, the auditors pointed out that during April 2006 to June 2006, the appellant paid advances to transporters for carrying raw material from Jodhpur to their factory and they failed to pay service tax against such advances paid amounting to ₹ 6,53,199/-. .....

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service tax on the advances made by the suppliers to the transporters. They also submitted that in February 2008 when the audit was going on, the factory of the appellant was closed due to financial crunch and subsequently, the appellant moved an application for waiver from payment of dues before BIFR authorities. Subsequently on 24.6.2008, the appellant received a letter from the Superintendent of Central Excise demanding the said payment and the appellant vide their letter dated 26.6.2008 int .....

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uthority confirmed the demand against the appellant and thereafter the appellant filed appeal before the Commissioner (Appeals) who upheld the demand but dropped the penalty under Section 76 and upheld the penalty under Section 78 of the Finance Act, 1994 and partially allowed the appeal. Now the appellant has filed this appeal against the penalty under Section 78 of the Finance Act, 1994. 3. The learned counsel for the appellant submitted that during the month from April to June 2006, the suppl .....

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down the factory w.e.f. 10.2.2008 and had also applied for waiver of dues before BIFR. He also submitted that finally they paid the service tax on 27.5.2009 along with interest. He further submitted that there was no intention to evade because the credit of the said service tax would have been available to them irrespective of the date of payment as cenvat credit as the appellant is manufacturer of finished excisable products and the entire exercise is revenue neutral and it is a settled princi .....

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issioner (Appeals) and has submitted that the extended period has been rightly invoked as there was intention on the part of the appellant to evade payment of service tax. 5. Heard the counsel for the parties and perused the record. 6. The only question to be decided by me is whether in the facts and circumstances, the appellant is liable to pay penalty under Section 78 of the Finance Act, 1994. It is a fact that the appellant has been paying service tax on part of the payment made by them to th .....

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erest amounting to ₹ 30,269/-. The appellant also brought on record the fact that due to financial crunch, they closed the factory w.e.f. 10.2.2008 and approached the BIFR for waiver of payment. The learned counsel submits that it was a bona fide mistake on the part of the appellant and also relies upon the decision of the Tribunal in the following cases in support of his contention that once the service tax and interest are paid, no penalty can be imposed:- (i) Dineshchandra R. Agarwal In .....

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