2014 (8) TMI 95 - AT - Service Tax

Levy of penalty - Goods Transport Agency services - Reverse Charge - service tax with interest was paid before issue of SCN - assessee contended that no case of active concealment is made out - Held that - no case of active concealment or willful suppression of facts, fraud or default has been made out against the appellant on the plain reading of the show-cause notice - it is an admitted fact that the appellant has paid the Service Tax along with interest before issue of show-cause notice under proper intimation to the department. In this view of the matter, the appellant has fulfilled the condition precedent in law and the requirement of Section 73(3) of the Finance Act, 1994 and is entitled to the benefit provided thereunder. - appellant puts on record that they have paid 25% of penalty under Section 78 and undertakes not to claim refund of the same. - Relief granted to assessee - Decided in favor of assessee.

Summary

Issues:
1. Appellant not paying Service Tax on Goods Transport Agency services under Reverse Charge Mechanism.
2. Adjudication of proposed demand and penalty under Sections 76, 77 & 78 of the Finance Act, 1994.
3. Appeal before Commissioner (Appeals) confirming the Order-in-Original.
4. Appellant's appeal before the Tribunal based on lack of active concealment and reliance on relevant legal provisions.
5. Benefit of Circular dated 3.10.2007 not available to the appellant as per Revenue.
6. Tribunal's final decision on the appeal.

Analysis:
The appellant, a contractor undertaking construction services, availed Goods Transport Agency services but did not pay Service Tax under the Reverse Charge Mechanism. Upon audit, the Revenue found discrepancies, leading to a show-cause notice demanding Service Tax, interest, and penalty under Sections 76, 77 & 78 of the Finance Act, 1994. The Order-in-Original confirmed the demand, citing suppression of facts and denial of Circular benefit.

The appellant appealed to the Commissioner (Appeals), who upheld the Order-in-Original. Subsequently, the appellant approached the Tribunal, arguing no active concealment and citing confusion regarding the tax liability on Goods Transport Agency services until 2009. The appellant relied on Section 73(3) of the Finance Act, 1994, allowing self-ascertainment of tax liability before notice issuance.

The Revenue contended that the Circular benefit was unavailable as the appellant paid the tax and interest only after the show-cause notice. The Tribunal, after considering both sides, found no active concealment or suppression of facts by the appellant. It noted the timely payment of Service Tax and interest before the notice issuance, fulfilling the conditions of Section 73(3). The appellant's payment of 25% penalty under Section 78 further supported their case. Consequently, the Tribunal set aside the impugned order, allowing the appeal and relieving the appellant of the demanded amount.

In conclusion, the Tribunal's decision favored the appellant, emphasizing compliance with legal provisions and timely payment of taxes, leading to the reversal of the adverse Order-in-Original and Commissioner's decision.