TMI Blog2022 (10) TMI 582X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that there is deliberate suppression of facts and therefore the Show Cause Notice issued and the penalties imposed are proper. It can be seen that the appellant on being pointed out has paid the service tax immediately. It is also seen that they have paid 1% penalty in case the matter falls under sec. 73(4A) of Finance Act, 1994. The conduct of the appellant pursuant to the verification of accounts shows that they had the intention to pay up the service tax. Further, the payment of service tax on GTA service during the relevant period was under litigation before various forums and there were conflicting decisions. It is also argued that the entire issue is a revenue neutral as they would be eligible to take credit of the service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cess of law, the original authority imposed penalty under sections 77 and 78 of the Finance Act, 1994. The appellant filed appeal before Commissioner (Appeals) who upheld the same. Aggrieved by the said order of imposing penalties, the appellant is now before the Tribunal. 2. The learned counsel Shri D. Jaishankar appeared and argued for the appellant. He submitted that immediately when the audit had pointed out the short-payment of service tax, the appellant had paid up the entire amount along with interest. In fact, during the relevant time, there was much confusion with regard to the tax that has to be paid on GTA service. There were various circulars which explained the meaning of consignment note and also the requirement to pay serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Spectrum Power Generation Ltd. Vs. CCE, Hyderabad reported in 2017 (3) GSTL 500 (Tri. Hyd.), CCE LTU, Bangalore Vs. Adecco Flexione Workforce Solutions Ltd. reported in 2012 (26) STR 3 (Kar.) and CCE, Nagpur Vs. Galaxy Construction Pvt. Ltd. reported in 2017 (48) STR 37 (Bom.). 5. The learned AR Shri R. Rajarajamn supported the findings in the impugned order. He adverted to para 2.01 of the Order in Original and submitted that there was deliberate suppression on the part of the appellant in not accounting the freight paid for the period 2010 11 and 2011 12 for an amount of Rs.11,77,406/. The said short-payment would not have come to light but for the verification and audit done by the department. Since there is deliberate suppressi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he removal of doubts, it is hereby declared that the interest under section 75 shall be payable on the amount paid by the person under this sub-section and also on the amount of short payment of service tax or erroneously refunded service tax, if any, as may be determined by the [Central Excise Officer], but for this sub-section. Explanation 2. - For the removal of doubts, it is hereby declared that no penalty under any of the provisions of this Act or the rules made thereunder shall be imposed in respect of payment of service tax under this sub-section and interest thereon. 9. It can be seen that the department has to refrain from issuing Show Cause Notice if the appellant pays up the service tax along with interest as ascertaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t services. Taking note of these submissions, I am of the view that there is no deliberate suppression of facts. On such score, sub-section (3) of section 73 would apply. The decision of the Hon'ble High Court of Karnataka in the case of Adecco Flexione Workforce Solutions Ltd. (supra) has held that no penalty can be imposed under sub-section (3) of section 73 of Finance Act, 1994. 10. From the foregoing, I hold that the penalties imposed under sections 77 and 78 are not legal and proper and requires to be set aside. The impugned order is modified to the extent of setting aside the penalties imposed under sec. 77 and 78 of Act ibid. Ordered accordingly. The appeal is allowed with consequential relief, if any. (Dictated in open cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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