2016 (12) TMI 662 - AT - Service Tax

Validity of proceedings initiated under sub-section (3) of Section 73 of the Finance Act, 1994 - imposition of penalty u/s 76 and 78 ibid - tax with interest paid before issuance of SCN - GTA service - reverse charge mechanism - Held that - I find that the entire amount of adjudged service tax alongwith interest was paid by the appellant before issuance of show cause notice and non-payment of service tax amount within the stipulated time is not attributable to fraud or collusion or wilful misstatement or suppression of facts, with intend to evade payment of service tax. Therefore, in terms of Sub-Section (3) of Section 73 ibid, there was no necessity for issuance of show cause notice for imposition of penalty. In other words, as per the said statutory provisions, on payment of service tax alongwith interest, further proceedings have to be closed for all practical and statistical purposes - appeal allowed - decided in favor of appellant-assessee.

Summary

The case involved the payment of service tax on GTA service under reverse charge mechanism. The appellant had paid the disputed service tax along with interest before the show cause notice was issued. The tribunal found no fraud or wilful misstatement, thus no penalty was imposed. The appeal was allowed in favor of the appellant.