2009 (8) TMI 22 - AT - Service Tax

Penalty u/s 76 Deposit of service tax suo motu before issuance of SCN - Appellant relied on the Board s Circular dated 03.07.2007, which is in respect of issuance of show cause notice for levy of penalty in cases when tax is paid suo motu by the assessee. This Circular is not placed before the lower authority and hence, has not been taken into consideration. As the Board has issued a clarification and the authorities are bound by the Circular issued by the Board, therefore I find that it is a fit case for re-consideration of the Adjudicating Authority after taking into consideration the Board s Circular. Matter remanded for reconsideration.

Summary

The Appellate Tribunal CESTAT, KOLKATA, in the 2009 (8) TMI 2019 case, heard an appeal against an order upholding the imposition of a penalty under Section 76 of the Finance Act. The Appellant's argument was that they should not be liable for any penalty as they had paid the Service Tax voluntarily, citing a Board Circular. The Circular stated that if an assessee pays the Service Tax before receiving a notice from a Central Excise Officer, the officer should not serve a notice under Section 73(1) of the Act. The Appellant argued that, based on this Circular and the provisions of Section 73(3) of the Act, the penalty against them was not sustainable. The Joint Departmental Representative argued that while the notice for Service Tax demand was barred under Section 73(3), there was no bar for issuing a notice for penalties, such as those for delayed payments. The Tribunal found that the Board's Circular was not considered by the lower authority and remanded the matter to the Adjudicating Authority for reconsideration in light of the Circular, with an opportunity for the Appellant to be heard. The appeal was thus disposed of by remand.