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2014 (10) TMI 768 - AT - Service TaxImposition of penalties u/s 76 - discharge of the service tax liability with interest before issuance of show cause notice - held that - Appellant was informed about the short payment of tax by the Jurisdictional Range Officer to which he complied by discharging the said Service Tax Liability by cheque dated 29-9-2009 and informed Range Officer. Secondly, the First Appellate Authority recorded in the impugned order that show cause notice was issued on 14-9-2009 which is factually incorrect and I find that the show cause notice has been issued on 14-9-2010. That is almost after a year the said short payment was made good with interest. In my view the provision of Section 73(3) of the Finance Act, 1994 are directly applicable to this case - Decided in favour of assessee.
Issues: Imposition of penalties under Section 76 of Finance Act, 1994.
Analysis: - The appellant contested the imposition of penalties under Section 76 of Finance Act, 1994, arguing that the Service Tax liability interest was directed to be paid by the jurisdictional range officer on a specific date, which the appellant complied with later. The appellant claimed that the provision of Section 73(3) of the Finance Act, 1994 should apply in this case. - The Tribunal noted that the appellant had indeed paid the short payment of tax after being informed by the Jurisdictional Range Officer and had informed the Range Officer accordingly. It was also found that the show cause notice was issued almost a year after the appellant had rectified the short payment with interest. The Tribunal held that the provision of Section 73(3) of the Finance Act, 1994 was directly applicable in this case. - Considering the factual matrix where the appellant had discharged the service tax liability with interest before the issuance of the show cause notice, the Tribunal deemed the penalty under Section 76 of the Finance Act, 1994 as unwarranted. As a result, the appeal was allowed, and the impugned order was set aside in this regard.
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