TMI Blog2018 (5) TMI 1716X X X X Extracts X X X X X X X X Extracts X X X X ..... nment departments. They cannot plead ignorance after the UO note is issued - The demand of duty is clearly recoverable under the proviso to Section 73 (1), from 24.02.2005, the assessee has definitely suppressed the value of taxable services rendered and evaded paying service tax in full knowledge that their services are taxable - The demand is sustained and the extended period of demand is invokable from 24.02.2005 till the date of show cause notice Penalty u/s 76 and 78 - Held that:- Since it is now well established fact that no penalty can be imposed under section 76 of Finance Act, even before amendment to this Section w.e.f. 14.05.2015 or prior to it, the penalty imposed under section 76 is, therefore, set aside - penalty u/s 78 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority confirmed the demand, interest and penalties accordingly. Aggrieved, the appellants filed appeal before Commissioner (Appeals) which was dismissed vide Order-in-Appeal No. 21/2008 (HII) S.Tax, dated 24.04.2008 and this appeal against the impugned O-I-A. The appellants prayed that the Order of Commissioner (Appeals) may be set aside on the following grounds: a) Extended period could not be invoked as proviso to Section 73 of the Finance Act, 1994 was not invoked and ingredients for invokind larger period were also not alleged in the show cause notice and also the said proviso was inserted in section 73 only w.e.f. 10.09.2004 and therefore could not be applied retrospectively. b) Commissioner (Appeals) had observed that larg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation was available in their balance sheets during the relevant period which was subject to periodical audit by Officers of Service Tax Department also and the Officers had never informed that the services rendered to the aforesaid Government Departments were liable for service tax. Since they had no malafide intention, no justification exists in imposing penalties under sections 76, 77 78 of Finance Act, 1994. g) Appellants further submit that demanding of interest from them is not correct as they have not collected any amount towards service tax and retained the same with them without paying to the department. 3. During the hearing, appellant forcefully reiterated the aforesaid arguments. 4. Ld. DR reiterated the argument ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice tax payable to the Government department is not paid and hence the invocation of extended period is justifiable. 5. We have considered both sides of the arguments. Section 73 of the Finance Act provides for recovery of service tax levied or paid or short levied or short paid or erroneously refunded, within a period of one year (during the relevant period). The proviso to this section says that service tax which has not been levied or paid or has been short levied or short paid or erroneously refunded by reason of fraud, collusion or wilful misstatement or suppression of facts or contravention of any provisions of this Chapter or of the rules made there under with intent to evade payment of service tax, demands can be raised within a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agree with the appellant that there was a general feeling, though erroneously, that no service tax is payable on the services rendered to the Government department as is evident from the U.O. note issued by Special Chief Secretary to the Govt. of Andhra Pradesh on 24.02.2005, a copy of which was also sent to Director General (Directorate of Service Tax), Mumbai and to the Commissioner of Customs CE, Hyderabad. After this UO note was issued, the appellant had no excuse not to add the value of services rendered to the Government departments in their returns and pay service tax on the services rendered by them to the Government departments. They cannot plead ignorance after the UO note is issued, considering his original plea or ignorance i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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