TMI Blog2018 (11) TMI 1150X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice tax. Other than the delay caused due to financial crisis, we do not find any material to establish an intention to evade payment of service tax. This is a fit case to invoke Section 80 since the appellant has put forward reasonable cause for the failure to discharge the service tax liability - the penalties imposed under Section 76 and 78 of the Finance Act, 1994 set aside without interfering with the penalty imposed under Section 77 of the Act ibid - appeal allowed in part. - Appeal No.: ST/00280 & 00281/2011 - Final Order No. 42481-42482/2018 - Dated:- 18-9-2018 - Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri. K. Rajendran, Consultant for the Appellant Shri. K. Vee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under Sections 76 and 78 of the Finance Act, 1994. It is his case that the appellant could not discharge the service tax during the relevant period since the company was undergoing much financial crisis. There was frequent change of persons in Accounts Section and they could not make necessary arrangements so as to coordinate their accounts for filing the returns. There was no intention to evade payment of service tax and the delay occurred only because the appellant was unable to pay the amount since the company was facing much financial hardship; that they have deposited the entire service tax along with interest and therefore, pleaded that the penalties imposed may be set aside. 3.2 The appellants contended that they could not pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned Order. He submitted that financial crisis cannot be a ground to set aside the penalties imposed invoking Section 80 of the Finance Act, 1994. The appellants had obtained the Service Tax Registration and were filing service tax returns up to 2005-06. After that they neither paid the service tax nor filed their returns. Though they collected service tax, the same was not deposited with the Government. This is a clear indication of suppression of facts and therefore, the penalty imposed under Section 78 of the Finance Act is legal and proper. 4.2 So also, since there is an admitted delay in paying the service tax, the penalty imposed under Section 76 ibid. is also legal and proper. However, the Ld. AR fairly conceded that there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dship and it took some time for them to recover and for that reason, the service tax liability got accumulated. Nothing is brought out from evidence that there was any positive act of suppression with an intention to evade payment of service tax. Other than the delay caused due to financial crisis, we do not find any material to establish an intention to evade payment of service tax. 7.3 The Hon ble jurisdictional High Court in the case of C.C.E., Coimbatore Vs. M/s. Sasi Advertising Pvt. Ltd. in C.M.A. No. 101/2018 dated 24.01.2018 had occasion to consider the appeal filed by the Department against the Order passed by the Tribunal, upholding the Order passed by the Commissioner setting aside the penalties imposed. The ground raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the said provisions, if the assessee proves that there was reasonable cause for the said failure. 31. Going through the reasons assigned by the assessee, on belated payment, we are of the view that the assessee substantiated reasonable cause for the failure in payment of service tax, within the stipulated time and hence, he is entitled to the benefit under Section 80 of the Finance Act. 7.4 In C.S.T., Chennai Vs. Lawson Travel Tours (I) Pvt. Ltd. 2015 (38) S.T.R. 227 (Mad.), the Hon ble High Court held that when the assessee faced financial crisis due to criminal breach of trust committed by their sub-agent and thereafter, paid the service tax voluntarily, the penalties imposed have been rightly set aside invoking Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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