TMI Blog2023 (8) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... section 73 (3) of the Finance Act, 1994. The action would have been seen in the spirit of the department being facilitators of trade. While there is no discretion in the imposition of mandatory penalties, the adjudicating authority has to examine whether the situation calls for such a penal provision to be invoked once duties along with interest were also seen to be safeguarded as per the voluntary action of the appellant. Penalties need not be imposed merely because a legal provision provides for it. It is the discretion of the authority to examine whether the law requires the provision to be enforced. The penalty imposed and upheld under sections 77 and 78 of the Finance Act 1994, by the impugned order, merits to be quashed and is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the appellant was not discharging service tax on the amounts collected as Administrative and Handling Charges from their sister concerns as the services fall under Business Support Services as defined under section 65(104((c) r/w section 65(105)(zzzq) of the Finance Act, 1994 for the period 2006-07 to 2007-08. On being pointed out by the department that the appellants are liable to pay service tax on the services provided to their sister concerns with effect from 1.5.2006, the appellant before issue of Show Cause Notice had voluntarily paid the service tax amount of Rs.6,76,675/- on 19.5.2009 and interest of Rs.1,83,385/- on 3.3.2010 and 4.3.2010. However, Show Cause Notice dated 28.12.2010 was issued to the appellant proposing to re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to their sister concerns. They have also not collected the service tax amount from their sister concerns. A mere averment in the Show Cause Notice that the appellant had suppressed the fact cannot mean that mens rea is established. Section 73(3) of Finance Act, 1994 imposes a bar on the issuance of a Show Cause Notice where an assessee has voluntarily paid the service tax demand along with interest. The expression shall not service any notice imposes an absolute bar against the issue of any notice or initiation of any proceedings in relation to the amount which has been deposited by the assessee. He relied on the decision of the Tribunal in the case of Hospitech Management Consultants Pvt. Ltd. Vs. CST (2023) 7 CENTAX 134 (Tri. Del.) to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces of Business or Commerce came into force from May 2006. In the initial period there was some confusion on the nature of services covered by the said declared service. Of the service tax amount paid, Rs 6,41,376/- was paid for the period 2006-07 and only Rs 35,300/- pertained to 2007-08. With the appellant accepting and paying tax with interest before issue of SCN, the matter should have been closed and allowed to rest in terms of section 73 (3) of the Finance Act, 1994. The action would have been seen in the spirit of the department being facilitators of trade. 7.2 While there is no discretion in the imposition of mandatory penalties, the adjudicating authority has to examine whether the situation calls for such a penal provision to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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