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M/s. Amcon Engineers Pvt. Ltd. Versus C.S.T. -Delhi

Imposition of penalty - Section 78 of the Finance Act, 1994 - Construction of Complex Services - Appellant prayed that financial difficulty is a reasonable cause for non-deposit of the tax with the Revenue and as such Section 80 should be invoked - Held that:- We really fail to understand that how the collected amount, which was required to be deposited, can lead to any financial hardship on the part of the assessee inasmuch as it was collected amount only which was required to be deposited. Ins .....

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positing the same with the Service Tax Department, clearly reflects upon the malafide intention of the assessee. In such a scenario, the provisions of Section 80 cannot be invoked, in as much as the said section speaks of a reasonable cause, which is bound to be bonafide cause. The fact that service tax was being collected by the appellant from their Customers reflects upon their knowledge that the services being provided by them attract service tax. Pocketing of the said collected amount is ind .....

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peal is to imposition of penalty of ₹ 1,36,83,810/- (Rs. One Crore Thirty Six Lakhs Eighty Three Thousands and Eight Hundred Ten Only) imposed upon the appellant in terms of the provisions of section 78 of the Finance Act, 1994. 2. As per the facts on record, the appellant is engaged in providing services falling under the category of Commercial and Industrial Construction Services, e.t.c. They were neither registered with the Service Tax Department nor were paying any service tax under th .....

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appellant submits that they are not challenging the confirmation of demand of service tax and, in fact, the same stands paid by them along with interest even prior to the issuance of the show cause notice. The challenge is only to the imposition of penalties. He further submits that it is correct that they were charging and collecting service tax from their clients but the same was not being deposited with the Revenue on account of financial difficulty being faced by them. By drawing our attent .....

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hey were collecting it from their customers and not depositing it with the Revenue only reflects upon their malafide intention, thus making the provisions of Section 80 as non-applicable. He submits that Section 78 provides for imposition of penalty in such cases and accordingly, supports the order of Original Adjudicating Authority. 5. We have considered the submissions made by both the sides. 6. There is no challenge to the confirmation of demand of service tax, which stands accepted by the ap .....

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to be deposited, can lead to any financial hardship on the part of the assessee inasmuch as it was collected amount only which was required to be deposited. Instead of depositing the same, the appellant have retained it for their own financial gains. We can appreciate financial difficulty to some extent if the said service tax was required to be deposited by the appellant from their own pocket. Even in that case, the appellant was under obligation to reflect their liability to the Revenue, by ta .....

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