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2018 (10) TMI 1075 - AT - Service TaxPenalty u/s 76 and 78 of FA - liability of tax duly discharged - Held that - There is no dispute about the liability of Service Tax of ₹ 41,61,205/- pertaining to the period January, 2013 to March, 2013 which has been confirmed by the Commissioner in the impugned order. Also it is not in dispute that the entire amount of Service Tax along with interest of ₹ 2,13,191/- had been discharged by the respondent. The learned Commissioner recorded his findings where it is held that the noticee had paid their entire service tax liability in respect of the impugned SCN by 14.08.2013 i.e. before initiation of investigation by the way of an authorized visit by the officials of the DGCEI to the premises of Gufic on 25.09.2013 which has resulted in the issuance of the said SCN on 21.10.2013. Hence the allegation of intention to evade payment of Service Tax on the part of the noticee does not stick. As such I do not find this to be a fit case for imposition of penalty under Section 78 of the FA, 1994, as the proviso to Section 73 (1) does not fit into the scheme of things . There is no reason to interfere with the observations made by the learned Commissioner, which is supported by reasons - appeal dismissed - decided against Revenue.
Issues:
- Appeal against imposition of penalty under Section 76 instead of Section 78 of the Finance Act, 1994. - Dispute over the liability of Service Tax for the period January, 2013 to March, 2013. - Applicability of VCES Scheme, 2013 on the case. - Payment of Service Tax liability and interest by the respondent. - Late filing of ST3 Returns and imposition of late fees. Analysis: 1. Appeal against Penalty Imposition: The Revenue filed an appeal against the imposition of penalty under Section 76 instead of Section 78 of the Finance Act, 1994. The Revenue argued that the penalty should have been imposed under Section 78 due to non-payment of Service Tax by the appellant for the period 2008 to 2012, even though it was later discharged. The Revenue contended that the learned Commissioner erred in not applying Section 78 to the case. 2. Dispute over Service Tax Liability: There was no dispute regarding the liability of Service Tax amounting to ?41,61,205 for the period January, 2013 to March, 2013. The Commissioner confirmed this liability in the impugned order. The respondent had paid the entire Service Tax amount along with interest of ?2,13,191, which was acknowledged. 3. Applicability of VCES Scheme, 2013: The respondent had approached the Department under the VCES Scheme, 2013, and discharged the entire Service Tax liability with interest for the period 2008 to 2012. The Commissioner considered this while adjudicating the liability for the subsequent period (January to March 2013) and imposed a penalty under Section 76 of the Finance Act, 1994. 4. Payment of Service Tax Liability and Interest: The respondent had paid the entire Service Tax liability along with interest before the issuance of the show-cause notice on 21.10.2013. However, the interest for the period January to March 2013 was paid later, on 25th July 2015. The Commissioner noted this delay in payment of interest and imposed a penalty under Section 76 based on the findings related to the payment timeline. 5. Late Filing of ST3 Returns and Late Fees: The ST3 Returns for the period January to March 2013 were filed after the issuance of the show-cause notice, on 27th March 2015. Late fees of ?20,000 were paid for the late filing of these returns. The Commissioner considered this delay in filing returns and imposed the applicable late fees as per the provisions. In conclusion, the Tribunal found no reason to interfere with the Commissioner's observations and upheld the impugned order, dismissing the Revenue's appeal. The judgment highlighted the importance of timely payment of taxes and compliance with filing requirements under the relevant tax laws.
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