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2015 (4) TMI 862 - AT - Service TaxWaiver of pre deposit - Imposition of penalty - Invocation of section 80 - held that - appellants have short-paid/evaded service tax, by reasons of fraud, and mis-representation of facts by filing false fabricated ST-3 returns, they are liable for penalty action under Section 78 of the Finance Act, 1994, which provides that the penalty shall not be less than, but which shall not exceed twice, the amount of Service Tax not levied, not paid or short paid. As the period of dispute involved in this case is 16.06.2005 to 31.03.2010 the provisions of Section 78- as it stood before its amendment vide Finance Act, 2011, w.e.f. 08.04.2011- will apply - Appellant directed to make pre deposit - Stay granted.
Issues:
- Waiver of pre-deposit of penalty under Section 78 of the Finance Act, 1994. Analysis: The appellants sought waiver of pre-deposit of penalty imposed on them under Section 78 of the Finance Act, 1994. They argued that although they had collected service tax from clients, it was remitted to their Consultant for payment. However, the Consultant did not deposit the service tax into the Bank but attached a bogus challan with the returns. The appellants, unaware of the fraud, requested the benefit of Section 80 of the Finance Act 1994. The Tribunal noted that the appellants had collected the service tax but failed to deposit it with the Government. The amount was paid during an audit investigation, and the appellants could not claim shelter under Section 80. The Tribunal distinguished a previous case where the benefit was granted, emphasizing that in this instance, the penalty under Section 78 was justified due to fraud and misrepresentation. The Commissioner (Appeals) had imposed a penalty equal to the amount of service tax evaded, directing the appellants to make a pre-deposit of 25% of the penalty within four weeks. In conclusion, the Tribunal upheld the Commissioner (Appeals)'s decision, requiring the appellants to make the specified pre-deposit. Compliance was to be reported by a set date, with the balance of the penalty staying stayed during the appeal process.
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