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2018 (7) TMI 857

Penalty u/s 78(1) of FA - case of Revenue is that the appellant had paid taxes only after being pointed out by the department and interest due have been paid only after the decision of the Commissioner (Appeals) - justification for invocation of section 80 of the Finance Act, 1994 - Held that:- There has been no challenge in the present case with regard to the finding in respect of mens rea evasion of tax etc. and both the authorities have concluded that there was enough mens rea in the present .....

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ssioner has demanded service tax to the tune of ₹ 12,67,449/-, Education cess of ₹ 25,349/- and Secondary & higher Edu. Cess of ₹ 12,674/- making total of ₹ 13,05,472/-. While doing so, the Dy. Commissioner has also imposed a penalty of ₹ 10,000/- under Section 77 and a penalty equivalent to 50% of tax liability under Section 78(1) of Finance Act, 1994. The Commissioner (Appeals) has upheld the demand of service tax and the penalty imposed under Section 78(1) an .....

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department and interest due have been paid only after the decision of the Commissioner (Appeals). Further, the appellant has not put forth any ground establishing its bonafide in the matter except for revenue neutrality. He further states that revenue neutrality may not be available to the appellant as taxes which have been paid after notice and invocation of extended period of time would justify in this case. He further stated that since no cogent reason to establish the bonafide have been put .....

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nd for suppressing the taxable value respectively as words and phrases shall pay a penalty , shall liable to pay penalty have been used in all the sections quoted above. The assessee is contesting penalty by quoting the transaction is revenue neutral. The Service tax to be paid by them on the import of erection, commissioning and installation service is available as input credit, as per his submissions and therefore he was not having any intention to avoid the Service tax. However, I find tha th .....

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. The assessee is therefore, liable for penalty under section 78. 6.1 The finding of the original authority has also been upheld by the Commissioner (Appeals) in the order. 6. I have carefully gone through the records of the case, the submissions made by the Appellant and the case laws on which the Appellant has placed reliance. The issue involved in non-payment of Service Tax by the Appellant on services obtained from abroad under Reverse Charge Payment basis. The Appellant is not contesting th .....

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so not correct as the interest liability is established in this case. Further, the Hon ble Apex Court in para 35 of the Order in the case of Star Industries Vs. Commissioner of Customs (Import), Raigad [2015 (324) ELT 656 (SC)] held as under: 35. It was submitted by the learned Counsel for the assessee that the entire exercise is Revenue neutral because of the reason that the assessee would, in any case, get CENVAT Credit of the duty paid. If that is so, this argument in the instant case rather .....

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dered the plea of revenue neutrality. Without proper challenge to such a finding with regard to the malafide intent, the appellant cannot challenge the imposition of penalty and claim waiver in terms of Section 80 just on the ground of revenue neutrality. 6.3 In view of above, as no cogent reason has been put forth to establish the bonafides by the appellant, I am not in favour of invocation of Section 80 of the Finance Act, 1994, in the present case. Appeal is, accordingly, dismissed (Order dic .....

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