2018 (4) TMI 603 - AT - Service Tax

Penalty - payment of service tax with interest on a later date - Accommodation Services - Held that - no instance has been pointed out in the show cause notice that the short payment and non payment of service tax was due to any malafide intention of the Appellant - the service tax was paid by Nov 2011 whereas the SCN was issued in Oct 2012. Since the Appellant had deposited the tax, they were eligible for the benefit u/s 73 (3) - penalty set aside - appeal allowed - decided in favor of appellant.

Summary

Issues: Short deposit of service tax, imposition of penalties under various sections, financial difficulty leading to delayed deposit, absence of malafide intention, eligibility for benefit under section 73(3), setting aside of penalty

In this case, the Appellant, a registered service tax payer, made a short deposit of service tax under the category of "Accommodation Services" for a specific period and did not pay service tax for another period. A show cause notice was issued demanding the short paid service tax and penalties under sections 76, 77, and 78, along with late fees. The adjudicating authority confirmed the demand and imposed penalties. The Commissioner (Appeals) rejected the appeal, leading to the present appeal by the Appellant.

The Advocate for the Appellant argued that the delayed deposit was due to financial difficulty, with no allegation of suppression or fraud in the notice. The burden of proof was on the revenue to establish malafide intention. On the other hand, the Assistant Commissioner supported the impugned order, stating that the revenue detected the short payment, making the Appellant liable for penalties.

Upon reviewing the case and the impugned order, the Tribunal found no evidence of malafide intention on the part of the Appellant. The Appellant's authorized person attributed the delay to financial and bank-related problems. Additionally, the service tax was paid before the show cause notice was issued. As the Appellant deposited the tax, they were eligible for the benefit under section 73(3). The Tribunal concluded that there was no basis for imposing a penalty on the Appellant. Since the service tax levy was not disputed and had been paid with interest, the penalty was set aside. The appeal was allowed with consequential reliefs, if any.

The judgment was pronounced in court on 22/03/2018 by Shri Ramesh Nair, Member (Judicial) and Shri Raju, Member (Technical) of the Appellate Tribunal CESTAT MUMBAI.