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2015 (6) TMI 1041 - CESTAT CHENNAI

2015 (6) TMI 1041 - CESTAT CHENNAI - TMI - Demand of Service tax and imposition of penalty - Section 77 and 78 read with Section 80 of the Finance Act, 1994 - International Courier Service - neither service tax paid nor ST-3 returns filed even after collecting from their customers - reason for non-payment is that the courier/cargo industry was facing severe recession - Held that:- it is to be noted that the appellant's act of not paying tax, collected from their clients, to the Revenue is totall .....

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- Decided against the appellant - Appeal No. ST/42492/2015 - Final Order No. 40871/2016 - Dated:- 2-6-2016 - Shri P. K. Choudhary, Judicial Member For the Appellant : Shri C. Ramkumar, Advocate For the Respondent : Shri R. Chandrasekaran, AC (AR) ORDER The appellant is engaged in providing "International Courier Service" mainly to the corporate clients. Based on audit objection by the department, it was noticed that appellant had received an amount of ₹ 64,77,834/- towards servic .....

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ection 73 (2) of the Act along with interest. He imposed penalty of ₹ 5000/- under Section 77 of the Finance Act. He also imposed penalty of ₹ 16 lakhs under Section 78 read with Section 80 of the Finance Act, 1994. On appeal, the learned Commissioner (Appeals) upheld the demand and penalty of ₹ 5000/- imposed under Section 77. However, the LAA reduced the penalty imposed under Section 78 to ₹ 8,00,660/- equivalent to tax demand. Hence the present appeal. 2. Ld. counsel S .....

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y sought for extension of time for filing ST-3 returns as well as for making the payment of service tax. Appellant paid the balance tax with interest (Rs.4,94,458/-) on 17.12.2009. However, the department issued notice invoking extended period under Section 73 (1) for tax demand, interest and penalties. The confirmation of entire demand of ₹ 8,00,660/- for the dispute period is not sustainable in law as service tax payment challans dt. 10.11.2009 and 10.12.2009 for ₹ 4,94,458/- were .....

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e Adjudicating Authority would know the actual state of affairs of the assessee (appellant). The demand has to be ₹ 8,00,660/- and not as claimed. He relied on the Hon'ble Gujarat High Court decision in the case of CCE & Customs Surat Vs Rajeshree Dyg. & Ptg. Mills (P) Ltd., 2014 (305) ELT 443 (Guj.) wherein the Hon'ble High Court has set aside the Tribunal's order of reducing the penalty on the ground that duty demand and interest was not paid before issuance of SCN. I .....

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on-payment of the tax is that the courier/cargo industry was facing severe recession. This is no ground for showing any leniency. Section 78 as extracted in the grounds of appeal reads as under :- Penalty for suppressing value of taxable service 78. Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, by reason of (a) Fraud; or (b) collusion; or (c) willful misstatement ; or (d) Suppression of facts; or (e) contravention of any of the .....

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