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2017 (7) TMI 1084 - AT - Service TaxPenalty - tax collected but not deposited to the Government - whether the appellant herein is required to be penalized under various Sections of the Finance Act 1994? - Held that - the appellant had failed to declare the correct taxability in the ST-3 return suppressed the value of taxable services and also did not deposit tax collected from their customers into Government treasury - if the Department had not conducted the detailed investigation the entire non-payment of tax would have gone unnoticed and escaped detection - penalty upheld - appeal dismissed.
Issues:
Whether the appellant is liable to be penalized under various Sections of the Finance Act 1994. Analysis: The judgment delivered by Shri M.V.Ravindran of the Appellate Tribunal CESTAT, Bangalore pertains to three appeals challenging Orders-in-Appeal No. 13/2012 and 30/2012. The central issue in all appeals is the potential penalty imposition on the appellant under the Finance Act 1994. The appellant argued that although the tax liability for services rendered was collected, it was not deposited with the Government due to a disagreement among partners. The appellant contended that the service tax liability had been subsequently discharged, with only the interest liability remaining unpaid. The appellant sought the invocation of Section 80 to waive the penalty. Upon reviewing the submissions and records, it was found that the appellant had failed to disclose the correct taxability in the ST-3 return, suppressed the value of taxable services, and neglected to transfer the tax collected from customers to the Government treasury. The judgment highlighted that without a detailed investigation by the Department, the non-payment of tax would have remained undetected. Given that the appellant collected the service tax liability but failed to remit it to the Government, the penalty imposed by the adjudicating authority and upheld by the First Appellate Authority was deemed appropriate. The judgment concluded that there was no justification to intervene in the reasoned order issued by the lower authority, leading to the rejection of the appeals. The judgment was pronounced and dictated in open court on 25/07/2017.
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