2015 (1) TMI 37 - AT - Service Tax

Service tax paid before issuance of SCN - Appellant facilitated financing facility to the purchasers of cars - Held that - According to the provisions of Section 73(3) of the Finance Act, 1994, no show cause notice shall be served if an assessee pays the entire amount of service tax payable with interest before issue of show cause notice. In this case this obligation has been fulfilled, therefore no show cause notice should have been issued in the first place. When show cause notice itself should not have been issued, penalty naturally could not have been imposed. Therefore, there is no merit in the impugned order and accordingly the penalty imposed under Section 76 is set aside - Decided in favour of assessee.

Summary

The appellate tribunal set aside the penalty imposed under Section 76 as the appellant had paid the entire service tax liability with interest before the show cause notice was issued, rendering the penalty inapplicable. The appeal was allowed in favor of the appellant.