2022 (3) TMI 1104 - AT - Service Tax

Validity of SCN issued - Waiver of interest under Section 75 and penalty under Section 78 of the Finance Act, 1994 - HELD THAT - The show-cause notice dt. 15/10/2018 itself had taken note of the tax paid along with interest as applicable and from the proposals itself, it is noted that the show-cause notice had proposed the appropriation of the payments made towards demands proposed to be raised. There being no due, the show-cause notice itself was not required to be issued as held by the Hon ble jurisdictional High Court in the case of COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX VERSUS M/S ADECCO FLEXIONE WORKFORCE SOLUTIONS LTD 2011 (9) TMI 114 - KARNATAKA HIGH COURT . Appeal allowed - decided in favor of appellant.

Summary

Issues: Challenge against demand of interest under Section 75 and penalty under Section 78 of the Finance Act, 1994.

Analysis:
1. The appellant challenged the order of the Commissioner of Central Excise (Appeals-II) regarding the demand of interest under Section 75 and penalty under Section 78 of the Finance Act, 1994. The adjudicating authority confirmed the demands but dropped the interest and penalties as proposed in the show-cause notice. The Revenue appealed against this decision, and the First Appellate Authority allowed the appeal, setting aside the dropping of interest and penalty. The appellant then filed the present appeal challenging this decision.

2. The show-cause notice issued on 15/10/2018 proposed to demand service tax along with interest under Section 75 and penalties under Sections 77 and 78 of the Finance Act, 1994. However, the notice itself acknowledged the tax paid along with interest, and proposed the appropriation of payments made towards the demands. The Tribunal noted that since there was no due amount, issuing the show-cause notice was unnecessary. This view aligns with a precedent set by the Hon’ble jurisdictional High Court in a similar case. Consequently, the Tribunal held that the impugned order could not be sustained, setting it aside and allowing the appeal. The Order-in-Original dated 30/01/2019 was restored as a result of this decision.

3. In conclusion, the Tribunal found that the show-cause notice was redundant due to the absence of any outstanding dues, as the tax paid along with interest had been acknowledged. This finding, supported by a relevant legal precedent, led to the setting aside of the impugned order and the restoration of the original order. The appeal was allowed in favor of the appellant based on this analysis.