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2017 (6) TMI 227 - CESTAT BANGALORE

2017 (6) TMI 227 - CESTAT BANGALORE - TMI - Penalty u/s 78 - Maintenance and repair services - Failure to discharge service tax - failure to file ST-3 returns - case of appellant is that they had deposited the service tax dues and the delay is purely due to liquidity crunch - Held that: - the appellant has collected the service tax and did not deposit the same to the Government Treasury which shows that he has an intention to evade service tax - penalty upheld - decided against appellant. - ST/3 .....

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category of maintenance and repair services. The Department observed that the appellant was providing maintenance and repair services on Annual Maintenance Contract basis to customers and collecting service tax from customers from 2004-05. However, the appellant had neither discharged the service tax liability nor filed ST-3 returns of the relevant period and therefore, a show-cause notice was issued to the appellant and after following the due process, the original authority confirmed the deman .....

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th the parties and perused the records. 4. Learned counsel for the appellant submitted that appellants are not challenging the service tax and the same has been paid along with interest and penalty of ₹ 5,000/- under Section 77 and the same was paid on 27.8.2010. He further submitted that imposition of penalty under Section 78 is not sustainable in law as the appellant has not wilfully suppressed relevant facts from the Department. He further submitted that it is apparent from the proceedi .....

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alization basis i.e., only after the payments were received from the customers for rendering the taxable services and in the present case, payments were received months after the invoices were raised which resulted in financial hardship for the appellant, who is a small service provider. He also submitted that the non-payment of service tax was not due to collusion, fraud, active concealment of tax, hence the penalty under Section 78 is not warranted and is liable to be set aside. He also submit .....

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High Court in the case of Commissioner of Central Excise vs. Santosh Textile Mills: 2016 (334) ELT 54 (Guj.). 5. On the other hand, the learned AR defended the impugned order and submitted that it is a case where service tax was collected but not paid and this itself shows mala fide intention of the appellant to evade payment of service tax. In support of this submission, he relied upon the decision in the case of Ketan Engineering Services Pvt. Ltd. vs. CCE reported in 2014 (36) STR 196 (Tri.- .....

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