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2016 (6) TMI 160 - CESTAT CHENNAI

2016 (6) TMI 160 - CESTAT CHENNAI - TMI - Waiver of penalty - Imposed under Section 78 of the Finance Act, 1994 - Services of Storage and Warehousing to various industries - non-payment of tax during the period Sept'2008 to Dec'2009 - entire demand along with interest paid before issuance of SCN - Held that:- both the OIO and OIA have justified the imposition of penalty under Section 78 of the Act without appreciating the fact that the ingredients have not been incorporated in the show cause not .....

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As per Judgment of Hon'ble Supreme Court in the case of CCE, Nagpur Vs Ballarpur Industries Ltd. [2007 (8) TMI 10 - SUPREME COURT OF INDIA], the show cause notice is the very foundation in any proceedings. What is not alleged in the show cause notice, cannot be traversed at a later point of time in any proceedings. Therefore, by following the same the penalty under section 78 of the Finance Act is unsustainable which is proved by the judgment of the Tribunal in the case of CST, New Delhi .....

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issue involved in this appeal relates to waiver of penalty of ₹ 25,51,403/- imposed under Section 78 of the Finance Act, 1994. 2. The brief facts of the case are that appellant is holder of service tax registration for providing services of Storage and Warehousing to various industries. They were collecting storage charges, insurance charges, handling charges and miscellaneous charges from their customers for storage of goods at their public bonded warehouse and paying service tax from Fe .....

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403/- under Section 78 of the Act. Upon adjudication of the notice, the adjudicating authority passed OIO No.85/2011 dt. 5.9.2011 confirming the demand along with interest. He appropriated the entire amount of tax and interest already paid by them. He imposed equivalent penalty of tax under Section 78 of the Act. Being aggrieved with the above order of adjudicating authority, appellants preferred appeal before Commissioner (Appeals). The ld. Commissioner (Appeals) vide impugned order dt. 27.7.20 .....

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of Chapter V of the Act. It is not a case of non-levy, non-payment, short levy or short payment of tax or erroneous refund. The Revenue has alleged suppression of facts by the appellant-assessee with intention to evade payment of tax and invoked longer period of limitation in this case. However, there is no mention or discussion on the allegation of fraud, collusion or wilful mistatement of suppression of facts either in the SCN or in the OIO so as to invoke Section 73 (1) of the Finance Act. Ld .....

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ed by audit before issuance of SCN, invocation of longer period is not invokable to impose equal penalty. He relied on the following case laws :- (1) CCE Bangalore Vs Geneva Fine Punch Enclosures Ltd.-2011 (267) ELT 481 (Kar.) (2) Continental Foundations Jt. Venture Vs CCE Chandigarh- 2007 (216) ELT 177 (SC) (3) Landis +Gyr Ltd. Vs CCE Kolkata-2013 (290) ELT 447 (Tri.-Kolkata) (4) Shivas Industrial Caterers India Pvt. Ltd. Vs CST -2014 (34) STR 367 (Tri.-Chennai) (5) Shriram EPC Ltd. VS CST Chen .....

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er with interest, before issue of show cause notice, penalty under section 78 of the Finance Act 1994 ought not to be imposed. The Appellant justified their above contention taking recourse to Section 73 (3) of the Finance Act, 1994. On the other hand, the revenue has taken recourse to Section 73 (4) of the said Act. For easy reference, the sub clauses (3) and (4) of Section 73 are reproduced below: SECTION 73. Recovery of service tax not levied or paid or short-levied or short-paid or erroneous .....

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ct 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 : Provided that the Central Excise Officer may determine the amount of short-payment of service tax or erroneously refunded service tax, if any, which in his opinion has not been paid by such person and, then, the Central Excise Officer shall proceed to recover such amount in the manner spec .....

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sub-section. (4) Nothing contained in sub-section (3) shall apply to a case 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) wilful mis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax. The appellant has laid emphasis on the fact that the show cause notice .....

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Higher Education Cess not paid. Whereas, it appears that assessee having failed to pay to the credit of the Central Government within the stipulated period the above said service tax that is liable for payment in accordance with the provisions of Section 68 or rules made thereunder, rendered themselves liable for payment of interest as applicable in terms of Section 75 of the Act." A reading of the above makes it evident that the only allegation is that the fact of non-payment of tax came .....

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t ; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax, the person, liable to pay such service tax or erroneous refund, as determined under sub-section (2) of section 73, shall also be liable to pay a penalty, in addition to such service tax and interest thereon, if any payable by him, which shall not be less than, but which shall not exceed twice, the amount of service tax so not .....

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