2010 (4) TMI 177 - AT - Service Tax

Penalty- service tax paid before issuance of Show Cause Notice- The assessees paid service tax together with interest on being pointed out by the excise authorities, prior to the issue of show-cause notice. Held that- set aside the penalties imposed under the provisions of Section 76 and 78 of the Finance Act, 1994 and allow the appeal.

Summary

The Appellate Tribunal CESTAT, Chennai ruled that penalties under Section 76 and 78 of the Finance Act, 1994 cannot be imposed if service tax and interest are paid before the show-cause notice is issued. The decision followed the precedent set in Shanti Casting Works Vs. CCE, Coimbatore, 2009 (15) STR 219. The penalties were set aside, and the appeal was allowed.