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2016 (7) TMI 471 - CESTAT CHENNAI

2016 (7) TMI 471 - CESTAT CHENNAI - TMI - Levy of penalty u/s 78 - waiver u/s 80 - admitted liability of service tax as paid with interest invoking extended period of limitation - In the instant case, entire services have been provided outside India and not received in India. So the recipient was under the impression that there were no liabilities to pay - Held that:- When the department officials are aware of the activities of the Respondent herein, the allegation of suppression is baseless. - .....

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ndent ORDER Revenue is in appeal against the impugned order on the only ground that the penalty imposed under Section 78 vide OIO has been set aside by the Ld. Commissioner (Appeals). 2. The Ld. AR Shri L. Paneerselvam, AC, submits that the respondent assesse had received services from foreign firms who do not have any office in India under Business Auxiliary Services . He further submitted that though the respondent assesse is assessed by the LTU and is well aware of all the statutory obligatio .....

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eanics Pacific Ltd. Vs. CST, Ahmedabad 2013 (32) STR 756 (Tri.-Ahmd.) relied upon by the Ld. Commissioner (Appeals) has not been accepted by the department and a civil appeal has been filed in the Hon ble Supreme Court and the same has been admitted vide C.A. No. D7374/2013 reported in 2014 (34) STR 3172 (SC). He further submitted that the respondent assesse while filing the appeal before the Ld. Commissioner (Appeals) had only disputed the levy of equal penalty under Section 78 and did not disp .....

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tax. If this is agreed by the appellant, there will be no show cause notice issued by; the department. He also relied on the judgment of the Apex Court in the case of UOI Vs. Dharmendra Textiles Processors - 2008 (231) ELT 3 (S.C). 3. The Ld. Counsel appearing on behalf of the respondent assesse Ms. Radhika Chandrasekar, Advocate, reiterated the findings of the Ld. Commissioner (Appeals) and submitted copies of the citations which were already relied upon before the Ld. Commissioner (Appeals) s .....

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40) STR 158 She further submitted that Section 80 for reasonable cause as per Rule 3 (3) of Import of Service Rules, services should have been received by the recipient in India. In the instant case, entire services have been provided outside India and not received in India. So the recipient was under the impression that there were no liabilities to pay and prayed for upholding of OIA and rejection of the Revenue s appeal. In her counter, she also submitted that the Ld. AR was referring to Secti .....

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enalty under section 78 of the finance Act 1994. The main argument on the side of the department is that the respondent had filed an appeal only to set aside the penalty imposed under Section 78 of the Act 1994 and not against the order confirming the demand by invoking the extended period of time. During the hearing, the Counsel for the Respondent submitted that this allegation was factually erroneous. The Counsel for the Respondent undertook to file the grounds of appeal as adduced before the .....

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evenue. When the department is aware of the activities of the Respondent, extended period cannot be invoked and the same is the case with imposition of penalty under section 78 of the Finance Act 1994. 6. The decision of the Tribunal in the case of Atwood Oceanics Pacific Limited reported in 2013 (32) STR 756 is squarely applicable to the facts of the present case i.e. just as M/s Atwood Oceanics Pacific Limited where the appellant therein chose to pay the tax, though there was a good ground for .....

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act that the issue as to whether the services which were rendered outside the country was a subject matter of litigation for many years and the issue is purely interpretative in nature and the fact remains that when the services were rendered outside India, in terms of the provisions of services (provided from outside India and received in India) Rules 2006 in order to tax under the category of business auxiliary service , the service must have been received in India is the belief which the Resp .....

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Unfortunately the assessing authority as well as the appellate authority seem to think. If an assessee does not pay the tax within the stipulated time and regularly pays tax after the due date with interest. It is something which is not pardonable in law. Though the law does not say so, authorities working under the law seem to think otherwise and thus they are wasting that valuable time in proceeding against persons who are paying service tax with interest promptly. They are paid salary to act .....

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