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TMI Blog2015 (1) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, no show cause notice and penalties were attracted in view of CBEC Circular F.No. 137/167/2006-CX-4 dated 03.10.2007. It was also argued that up to September 2004 appellant was duty discharging Service tax with respect to Commercial or Construction Services. That for the period October 2005 to March 2010 there was a confusion with respect to services provided by the appellant whether under Works Contract Services or Construction of Commercial Complex. That due to the prevailing confusion appellant also could not file the required ST-3 returns. He relied upon the following case laws in support of his argument:- (a) C Ahead Info Technologies India P. Limited vs. CCE, Bangalore - [20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty under Section 78 of the Finance Act, 1994. 3. Shri G.P. Thomas (AR) appearing on behalf of the Revenue defended the orders passed by the lower authorities. 4. Heard both sides and perused the case records. Appellant was discharging tax liability up to September 2004 and thereafter stopped making the payment of Service Tax No ST-3 returns was filed by the appellant after September 2004. Once appellant was aware of the fact that service tax on the services provided was paid earlier, it cannot be considered that there was no intention to evade payment of tax by suppression when appellant was not even filing the statutory returns of the tax which he was paying earlier. Accordingly, it is held that penalties under Section 78 of the Fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. It is thereafter a communication was sent as per Annexure 'B' pointing out that he is liable to pay Rs. 4,81,370/- of service tax, Rs. 6,497/- on Education Cess and Rs. 51,963/- interest, in all a sum of Rs. 5,39,830/-. On receipt of the said communication he promptly paid the said amount on 23-11-2005. It is there after proceedings were initiated under Section 73 of the Finance Act asking him to show cause why penalty under Sections 76 and 78 should not be imposed for suppression of facts and for wilful misstatement. He gave a reply contending that he had not maintained accounts and he had not received the subscription from the consumers. He paid service tax in respect of payment received and he had not paid service tax in respect of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; 4. Per contra learned counsel for the Revenue submitted that sub-section (3) of Section 73 of the Finance Act has no application to a case of suppression of facts, wilful mis-statement and therefore, the assessing authority as well as the Tribunal were justified in not granting the benefit to the assessee under sub-section (3) of Section 73 and levying penalty. 5. From the material on record, it is clear that the assessee registered himself as a service provider under the Act as far back as 2002 thereafter he has filed returns regularly. Therefore, he is aware of the liability to pay tax. On the ground that some of the subscribers did not pay the money due to him he has not remitted any servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s only under Section 78. In fact the proviso to Section 78 makes it very clear that if penalty is payable under this Section, the proviso to Section 76 shall not apply. Thereby no penalty could be imposed both under Sections 76 as well as 78. Therefore, in this case the penalty is to be construed under Section 78. To that extent the appeal succeeds. Once Section 78 is attracted, proviso to Section 78 makes it clear, a person who is liable to pay penalty in addition to payment of tax and interest, if he pays the said tax and interest within 30 days from the date of determination of the liability by way of an order the penalty payable is only 25%. This statutory provision has been ignored both by the Assessing Authority as well as by the Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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