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TMI Blog2012 (9) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee is guilty of willful suppression, fraud and misrepresentation. Under Section 80 of the Act if the assessee proves that there was a reasonable cause for the failure to pay the service tax, the competent authority can always drop the penalty proceedings. The question of penalty proceedings would arise only when there could be valid recovery proceedings under Section 73(1) of the Act. That is the reason when the ‘non obstante’ clause in Section 80 refers to only Sections 76, 77 and 78 and not to Section 73 of the Act. When the limitation period under Section 73(1) of the Act has expired and when the case does not fall under the proviso thereto, the question of penalty proceedings would not arise. Extended period of limitation – He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the IICT to show case as to why an amount of ₹ 1,38,68,461/- being the service tax payable on the value of Scientific and Technical Consultancy services during the above mentioned period should not be demanded under the said provision; interest as applicable under Section 75 of the Act should not be paid by the assessee and penalty should not be paid by them under Sections 76 and 78 of the Act for violation of the provisions of the Act. 3. The IICT submitted its replies on 29-5-2006, 9-6-2006 and 28-12-2007. It explained that an amount of ₹ 61,73,714/- was paid towards service tax during 2005-2006 towards arrears on all the old receipts in respect of sponsored and collaborative projects except grant-in-aid from Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n view of Section 80 of the Act cannot be a ground to draw an inference that the proceedings under Section 73 of the Act are barred by limitation. According to him, the proceedings for recovery of service tax not levied under Section 73 and the proceedings for levying penalty under Sections 76, 77, 78 and 79 are different and the lenient view taken in the matter of penalty cannot be a ground for invalidating the recovery proceedings. 6. There is no dispute that as per the notification dated 9-7-2001 vide F. No. B.11/1/2001-TRU issued by C.B.E.C., the consultation provided in relation to the research projects funded by grand-in-aid by the Government, no service tax is payable. During the course of interlocutory proceedings IICT took the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction (1) of Section 73 of the Act. Needless to mention that when there is fraud, collusion, willful mis-statement, suppression of facts or contravention of any provisions of the Act, the period of limitation of one year extends to five years. If for the purpose of Section 80 of the Act, the assessee is not liable to pay the penalty because of bona fide doubt they entertained, for the same reason it cannot be said that the case falls in any of the categories under the proviso to Section 73(1) of the Act. 8. The Senior Counsel for the Central Excise is right when he submits that a provision like Section 80 of the Act is absent in Central Excise Act, 1944, and therefore, the penalty proceedings have to be viewed separately. Even under Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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