2016 (4) TMI 198 - AT - Service Tax

Imposition of penalties for non discharge of Service tax liability - Section 78 of the Finance Act, 1994 - Demand of Service tax along with interest is discharged by appellant - Demand raised on allegation that the consultant, upon handing over the Service Tax matter defrauded appellant by showing the payment of entire Service Tax liability by forged challans - Held that - as the ratio in the case of Hemangi Enterprises vs. Commissioner of Central Excise, Pune I 2015 (10) TMI 1732 - CESTAT MUMBAI covers the issue. By respectfully following the same, the penalties imposed on the appellant are set aside. - Decided in favour of appellant

Summary

Issues involved: Penalties imposed on the appellant under Section 78 of the Finance Act, 1994 for non-discharge of Service Tax liability.

Analysis:

The judgment by the Appellate Tribunal CESTAT Mumbai dealt with an appeal against penalties imposed on the appellant under Section 78 of the Finance Act, 1994 for failing to discharge their Service Tax liability. The records indicated that the Service Tax demand along with interest had been paid by the appellant. The issue arose from an allegation that a consultant had defrauded the appellant by presenting forged challans as proof of payment of the Service Tax liability. The Tribunal noted a similar case involving the same consultant in a previous judgment, where the penalty imposed on the main appellant was set aside. Upon reviewing various records such as the general ledger and bank statements, it was found that the appellant had withdrawn amounts from the bank and provided them to the consultant for settling the Service Tax liability.

The Tribunal, citing the precedent set in the earlier case involving the same consultant, decided to set aside the penalty imposed on the appellant and upheld by the first appellate authority. The decision was based on the similarity of facts between the two cases and the acknowledgment that the appellant had made efforts to discharge their Service Tax liability by providing funds to the consultant. Consequently, the appeal was allowed, and the penalty was revoked.