TMI Blog2019 (1) TMI 1311X X X X Extracts X X X X X X X X Extracts X X X X ..... it was duty bound to remit amounts collected by it towards service tax, in a planned manner, and as required by law. The deposit belatedly, by it, on the ground that the amounts were deposited on adhoc basis due to operation of a centralised system, cannot be a legitimate excuse. What is evident is that the assessee/appellant withheld the amounts collected from the service recipient as tax liability. As the remitter, assessee/appellant was duty bound to comply with the terms of the Finance Act and Rules, which prescribed not only filing of returns but also periodic deposit of these amounts. The delay in deposit of these amounts spanned over a period of two and half years and therefore, amounted to misreporting of true and correct facts. To ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es the question of law as to whether imposition of penalty for non-payment of service tax was unwarranted . 2. The brief facts are that the appellant was a regular service tax assessee. For certain period starting from 2006-07, 2007-08 to 2008-09 [April to September] the appellant had not paid the entire service tax liability but only discharged a part thereof and also did not pay the amounts due in time. Consequently, it claimed that it was unable to discharge its tax liability on account of some internal difficulties. Furthermore, significantly it claimed that the amounts were not available with it at the relevant time. The service tax dues were ultimately paid on 09.01.2009 which is noted in the Show Cause Notice issued to the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the service tax is payable by the appellant, during the material time, only when the consideration for services were received. Thus, it is apparent that the liability to service tax is after the receipt of money from the client. It is clearly recorded that the appellants realized the invoice amount inclusive of service tax and they have not paid the service tax to the Government thereafter, as stipulated by the provisions of Finance Act, 1994. It is clear that the amount realised from the clients which included the tax, has been used for internal purposes by the appellant disregarding the statutory tax liability to the Government. The bona-fideness of the appellant cannot be accepted in such an act. Financial hardship cannot be pleaded aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riginal Authority has recorded that after numerous letters to follow up, it is noted that the appellant was registered centrally at Delhi only on 15/12/2008. Thus, we note that the attitude of the appellant did not provide substance to their claim of bonafideness for delay in discharging of tax liability in time. In Indsur Global Ltd. vs. Addl. Commr. of Service Tax, Vadodara reported in 2015 (38) S.T.R. 14 (Guj.), the Hon ble Gujarat High Court held that when the assessee recovered the service tax from service recipient and did not deposit with the Government till it was pointed out and followed up by the Department, provision of Section 80 cannot be invoked. The said order has been affirmed by the Hon ble Supreme Court reported in 2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the present case in view of the facts discussed above. Such closure is not permissible if the case is covered under the provisions of Section 73(4). 7. The appellant also pleaded for reduction of penalty to 25% is available to the appellant when the service tax dues alongwith interest and alongwith the said 25% penalty is paid within 30 days of order passed by the Commissioner. In the present case, though it is recorded that the appellants have discharged service tax liability with interest before the notice they have not paid the 25% of the penalty which is also required to be paid within one month of the order to avail such reduction in penalty. No authority can give extension of time for such concession. 6. This Court is of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d or short-paid, or erroneously refunded, by reason of fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of this Chapter or of the rules made thereunder with the intent to evade payment of service tax, the person who has been served notice under the proviso to sub-section (1) of section 73 shall, in addition to the service tax and interest specified in the notice, be also liable to pay a penalty which shall be equal to hundred per cent. of the amount of such service tax: Provided that in respect of the cases where the details relating to such transactions are recorded in the specified record for the period beginning with the 8th April, 2011 upto the date on which the Finance Bi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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