2014 (8) TMI 151

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..... Sub-section (4), penalty may still attach if there is non-payment of Service Tax by reason of fraud, collusion, wilful mis-statement, suppression of facts or contravention of provisions of the statute with intent to evade payment of Service Tax - Since the recipient company had claimed Cenvat credit on the service tax remitted by the assessee, eventually no liability was incurred by the service r .....

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..... dated 20/06/2013 raising following questions for our consideration: "(a) Whether in the facts and circumstances of the case, the Tribunal has committed substantial error of law in quashing the penalty imposed upon the respondent by application of section 73(3) of the Finance Act, 1994? (b) Whether in the facts and circumstances of the case, the impugned order passed by the Tribunal in ac .....

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..... he penalty applying Section 73(3) of the Finance Act, 1994 and following the decision of the Karnataka High Court in the case of C.C.E. & S.T. v. ADECCO Flexione Workforce Solutions Ltd. reported in 2012 (26) S.T.R. 3 (Kar.). 3. This was on the premise that admittedly the assessee had paid the tax even before issuance of Show-cause Notice. In terms of Section 73(3) of the Finance Act, 1994, he, t .....

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..... e is non-payment of Service Tax by reason of fraud, collusion, wilful mis-statement, suppression of facts or contravention of provisions of the statute with intent to evade payment of Service Tax. In the present case, the Tribunal noted that, "...Since the recipient company had claimed Cenvat credit on the service tax remitted by the assessee, eventually no liability was incurred by the servi .....

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..... Act, prohibits initiation of proceedings for recovery of penalty". 6. When there is a finding of fact that this was not a case of non-payment of Service Tax with intent to evade the payment of the same, question of applying Sub-section (4) of Section 73 of the Finance Act, 1994 and resultantly exclusion of application of Sub-section (3) thereof, would not arise. The question of law otherwis .....

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