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TMI Blog2019 (2) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... he department that appellants had not discharged service tax liability amounting to Rs. 77,94,334/- for the period from April 2009 and March 2010, although they realized taxable value as well as service tax from their clients. After being pointed out by audit, it appeared that appellants paid part of the arrears and filed the ST-returns for half year ending 30.09.2009 on 27.08.2010. However, ST-3 returns for half year ending 31.03.2010 had not been filed by them. Accordingly, SCN dt. 11.10.2010 was issued to the appellants inter alia, demanding the said amount with interest thereon and also proposing imposition of penalties under various provisions of law. In adjudication, the Commissioner vide impugned order held that appellant was liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax and Rs. 1,61,469/- towards Interest was paid after issue of Show Cause Notice. The Appellant paid the entire Service Tax of Rs. 77,94,334/- along with interest of Rs. 6,85,262/- by arranging funds from outside on a very high interest. iii) The payment of the dues by the appellant shown his intention that they want to buy peace. Hence the penalty imposed under Section 76 of the Finance Act, 1994 is not sustainable in law. iv) In any case the appellant has been paying Service Tax on billing basis and the amounts collected from the Appellant's customers was not being used for furtherance of business and this resulted in belated payment of tax in the disputed period. Hence the appellant prays that imposition of penalty under Section 76 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CE Coimbatore vide Final Order No.42481-42482/2018 dt. 18.09.2018 wherein it was held when reasonable cause for the failure to discharge service tax liability was available, and especially there is no evidence to show that that the delay / default was due to any wilful act to evade payment of duty, it is a fit case for invocation of Section 80 of the Act. The relevant portions of the aforesaid decision are reproduced below : ‚ 7.2 It can be seen from the contentions put forward as well as the records that the appellants, though initially were paying service tax and were filing returns properly, had defaulted payment of service tax and filing of returns after 2005-06. The company was going through much financial hardship and it took s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the interest liability prior to the issuance of the Show Cause Notice. 29. Perusal of the material on record discloses that the interest payable on the belated payment of service tax was Rs. 12,63,324/- and that even prior to the issuance of the Show Cause Notice, assessee / respondent paid interest amount of Rs. 5,23,151/-. The remaining amount of Rs. 7,40,163/- had been paid on 03.11.2009 immediately on receipt of Show Cause Notice dated 20.10.2009, i.e., within 13 days. 30. As per Section 80 of the Finance Act, 1994, notwithstanding anything contained in the provisions of Section 77 or 1st proviso to Section 78, no penalty shall be imposable on the assessee for any failure referred to in the said provisions, if the assessee proves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity. We therefore set aside the penalties imposed under Section 76 and 78 of the Finance Act, 1994 without interfering with the penalty imposed under Section 77 of the Act ibid." 5.2 So also, in the case of Sri Kalki Enterprises Vs CGST & CE Chennai vide Final Order No.42768-42769/2018 dt. 23.10.2018, in a case where the appellant had pleaded that financial exigencies as a ground for non-payment of service tax in due time, this Bench held in favour of the appellant in the matter of invocation of imposition of penalty. The relevant portion of the aforesaid order is reproduced below : "5. The appellant is contesting the penalties imposed only. In Appeal No. ST/300/2012, the adjudicating authority has imposed a penalty under section 76 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances of the above two decisions are pari materia and that of the appeal at hand. Applying the same ratio, we have no hesitation in holding that while the demand of tax liability is very much justified, imposition of penalty under Section 76 of the Finance Act, 1994 is not justified since there was reasonable cause for failure of the appellant to discharge tax liability. However, the penalty imposed under Section 77 ibid is fully justified and no interference is made with the same. So ordered. 6. Appeal is therefore partly allowed by way of setting aside of penalty imposed under Section 76 of the Finance Act, 1994. The MA filed by Revenue for change of cause title consequent to the introduction of GST and the resultant change in the ju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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