TMI Blog2019 (1) TMI 778X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notices have invoked section 73 also. The contention of the department that there is suppression of facts with intention to evade payment of service tax is not supported with any evidence. For these reasons, there are no grounds to impose penalty under section 78 - there are no ingredients to impose penalty under section 78. The appellants have established that the delay in payment of service tax was due to the default of one of the clients and consequent financial hardships. They have given reasonable cause for failure and we hold that it is a fit case for invocation of Section 80 to set aside the penalties. The penalty imposed under sections 76 and 78 in these appeals cannot sustain - impugned orders are modified to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ST/423/2012 02/2012 dated 30.3.2012 Jan. 2009 to March 2010 Rs.2,52,41,055/- along with interest and penalties ST/446/2012 4. Appeal ST/446/2012 is filed by department against the order passed by Commissioner who imposed penalty only under section 76 and did not impose penalty under section 78 of Finance Act, 1994. Appeal No. ST/68/2011 is filed by department against Order-in-Original dated 29.10.2010 contending that Commissioner has appropriated ₹ 2,59,20,009/- without proper verification. 5.1 On behalf of the assessee, ld. counsel Shri M.N. Bharathi submitted that the assessee has paid up the liability and is confining the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted information has been unearthed by the department from any source. Hence the imposition of penalty under section 78 of the Finance Act is not sustainable. He relied upon the following case laws:- a. M/s. Sri Kalki Enterprises Vs. Commissioner of GST Central Excise, Chennai Final Order No. 42768 42769/2018 dated 23.10.2018. b. M/s. Jayem Automotive Ltd. vs. Commissioner of Central Excise, Coimbatore Final Order No. 42481 42482/2018 dated 18.9.2018. c. Collector Vs. Chemphar Drugs 1989 (40) ELT 276 (SC) d. M/s. Phawa Chemicals Vs. Commissioner of Central Excise 2005 (189) ELT 257 (SC). 5.2 The ld. Counsel also submitted that their bonafide act stands substantiated by their conduct in paying up the service tax amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s along with willful suppression of facts and misstatements. Therefore there should be some deliberate and positive act on the part of the assessee with intention to evade payment of service tax in order to constitute willful suppression of facts for imposing penalty. We do not find any such positive act forthcoming from the facts of these appeals. In fact, it is brought out from the records that the assessee had suffered huge financial hardships due to the default on the part of one of the clients to pay up an amount of ₹ 1,44,04,726/- to the assessee. The statutory auditor has given certificate showing that this amount was outstanding from their client M/s. Rank Investments and Credits (India) Ltd. The assessee is engaged in the bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Mad.) had occasion to analyze a similar issue with respect to imposition of penalty under section 78 and observed that bonafide omission will not lead to conclusion of suppression under section 78 of Finance Act. The Tribunal in the case of Jayem Automotive Ltd. vide Final Order referred supra had considered a similar issue of imposition of penalty under section 76 as well as 78 and held that when there is no sufficient evidence to prove that there has been deliberate act on the part of the assessee to suppress facts and to evade payment of service tax, penalty cannot be imposed. The relevant portion of the order is reproduced as under:- 7.4 In C.S.T., Chennai Vs. Lawson Travel Tours (I) Pvt. Ltd. 2015 (38) S.T.R. 227 (Mad.), the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants submitted details of payment of ₹ 2,60,31,147/- towards service tax liability of ₹ 2,59,20,009/-. In para 10 of show cause notice, the payments already made is shown as ₹ 1,65,00,000/- from 2.1.2009 and 10.2.2009. As per para 8 of the impugned order, in order to verify correctness of service tax liability, the premises was visited by officers on 12.3.2009, 27.3.2009, 2.4.2009, 10.4.2009,22.4.2009, 27.4.2009 and 30.4.2009. Therefore, the contention of department that the payments made on 30.4.2009, 13.3.2009 and 26.5.2009 have not been verified and require verification is without any factual basis. The Commissioner having appropriated the amount of ₹ 2,59,20,009/- already paid, we hold that the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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