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2023 (9) TMI 572 - AT - Service TaxLevy of equal penalty u/s 78 of FA - delay in payment of service tax - delay in filing of returns - intent to evade service tax or not - suppression of facts or not - scope of SCN - HELD THAT - The Notice was issued to the Appellant for a demand of Rs. amount of Rs.96,80,867/-,whereas the adjudicating authority has gone beyond the Notice and confirmed an amount of Rs.1,08,13,836/- - it is observed that even if an excess amount of service tax was admitted by the Appellant, the right course of action would be to issue a Corrigendum to the demand and include the excess amount to the Notice before confirmation. Thus, the confirmation of duty in excess of the demand made in the notice is not sustainable. Accordingly, the confirmation of Service Tax of Rs.96,80,867/- as demanded in the Notice is upheld. Equal Penalty - HELD THAT - The delay in payment was only due to financial crisis. In the show cause notice also there was no allegation of suppression of fact with intention to evade payment of service tax. Further, they stated that as they have paid the entire amount of service tax confirmed along with interest, they could have availed the SVLDRS Scheme, but could not do so due to illness and demise of one of the working partners. Accordingly, they requested for waiver of penalty under Section 80 of the Finance Act, 1994 - Notice only says that 'had the scrutiny of records not been conducted by the Audit, the nonpayment of service tax could have gone undetected'. There is no other evidence brought on record to allege suppression of fact on the part of the Appellant with an intention to evade payment of tax. Further, if the Appellant has any intention to evade payment of tax, they could not have declared more tax liability than what was demanded in the Notice, on their own volition - there is suppression of fact with an intention to evade payment of tax has been not established in this case. Accordingly, it is deemed a fit case to invoke the provisions of Section 80 of the Finance Act, 1994 and waive the penalty. The demand of service tax of Rs.96,80,867/- along with interest as demanded in the Notice upheld - Penalty imposed under Section 78 of the Finance Act, 1994 is set aside by invoking the provisions of Section 80 of the Finance Act, 1994 - appeal disposed off.
Issues involved:
The issues involved in the judgment are confirmation of service tax demand exceeding the amount mentioned in the Show Cause Notice and imposition of penalty under Section 78 of the Finance Act, 1994. Confirmation of Service Tax Demand: The Appellant, engaged in Cargo Handling Service, was issued a Show Cause Notice for non-payment of service tax during the Financial Year 2009-10. The Notice demanded an amount of Rs.96,80,867/-, but the adjudicating authority confirmed a higher amount of Rs.1,08,13,836/-. The Appellant argued that the law does not allow confirmation of any amount beyond the demand in the Notice, citing Section 73(2) of the Finance Act, 1994. The Appellant's submission was that the excess liability was not disputed and was admitted by them. However, the Tribunal held that the confirmation of duty in excess of the demand made in the notice is not sustainable. Therefore, the confirmation of Service Tax of Rs.96,80,867/- as demanded in the Notice was upheld. Imposition of Penalty: The Appellant contested the penalty equal to the service tax imposed under Section 78 of the Finance Act, 1994. They argued that there was no intention to evade payment of service tax, as they voluntarily declared a higher liability than demanded in the Notice. The Appellant also highlighted that there was no allegation of suppression of fact to evade tax in the Show Cause Notice. The Tribunal found merit in the Appellant's submissions and observed that suppression of fact with an intention to evade payment of tax was not established. Consequently, the provisions of Section 80 of the Finance Act, 1994 were invoked to waive the penalty. The demand of service tax of Rs.96,80,867/- along with interest was upheld, while the penalty under Section 78 was set aside. The appeal was disposed of accordingly.
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