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TMI BlogNo penalty could be imposed when the amount of Service tax has been paid along with interest before issuance of Show Cause NoticeX X X X Extracts X X X X X X X X Extracts X X X X ..... No penalty could be imposed when the amount of Service tax has been paid along with interest before issuance of Show Cause Notice - By: - Bimal jain - Service Tax - Dated:- 14-2-2015 - - Dear Professional Colleague, No penalty could be imposed when the amount of Service tax has been paid along with interest before issuance of Show Cause Notice We are sharing with you an important judgm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of Hon ble CESTAT, New Delhi, in the case of CCE, Panchkula Vs. M/s. Krishna Cylinders [2015 (1) TMI 1197 - CESTAT NEW DELHI] on the following issue: Issue: Whether the penalty can be imposed when the amount of service tax has been paid along with interest before issuance of Show Cause Notice? Facts and background: During the course of audit it was revealed that Kri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shna Cylinders ( the Assessee ) has not paid Service tax during the period from April 1, 2006 to March 31, 2007 on outward Goods Transportation services. However, on being pointed out by the audit team, the Assessee paid the entire amount of Service tax along with applicable interest. Thereafter, a Show Cause Notice ( SCN ) was issued to the Assessee to appropriate the amount already paid by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessee and for imposition of penalties under Sections 76, 77 and 78 of the Finance Act, 1994 ( the Finance Act ). Thereafter, in the Adjudication proceedings, the amount already paid by the Assessee was appropriated against the demand of Service tax and interest and various penalties under Sections 76, 77 and 78 of the Finance Act were confirmed. On appeal being filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Ld. Commissioner (Appeals), the penalties under Sections 76, 77 and 78 of the Finance Act were set aside by invoking Section 80 of the Finance Act . Being aggrieved, the Revenue preferred an appeal before the Hon ble CESTAT, Delhi. The Revenue submitted that in the present case, the demand has been confirmed and admitted by the Assessee for the extended period of limitation. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, the Assessee cannot escape the penalties. It was further submitted when extended period of limitation has been invoked and liability has been admitted by the Assessee, benefit of Section 80 of the Finance Act cannot be granted. Furthermore, relying upon the decision in the case of Machino Montel (I) Ltd. [ 2006 (7) TMI 23 - HIGH COURT OF PUNIAB HARYANA (CHANDIGARH) ] , it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that mere deposition of the duty demand before issuance of SCN cannot give the benefit to the Assessee for non-imposition of penalty. Held: The Hon ble CESTAT, Delhi after discussing Section 73(3) of the Finance Act held that as per the provisions of Section 73(3 ) of the Finance Act, the SCN was not required to be issued when Service tax along with interest has been pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Assessee before issuance of SCN. Further, in SCN there were no specific allegations of non-payment by way of fraud, collusion, willful misstatement or suppression of material facts. Accordingly, it was held that although the SCN was issued to the Assessee which was not required to be issued as per Section 73(3) of the Finance Act , no penalty could be imposed. Hope the informati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on will assist you in your Professional endeavors. In case of any query/ information, please do not hesitate to write back to us. Thanks and Best Regards, Bimal Jain FCA, FCS, LLB, B.Com (Hons) Delhi: Flat No. 34B, Ground Floor, Pocket - 1, Mayur Vihar, Phase - I, Delhi - 110091, India Desktel: +91-11-22757595/ 42427056 Mobile: +91 9810604563 Chandigarh: H. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 908, Sector 12-A, Panchkula, Haryana - 134115 Kolkata: Ist Floor, 10 R G Kar Road Shyambazar, Kolkata - 700 004 Email: [email protected] Web: www.a2ztaxcorp.com Disclaimer: The contents of this document are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the authors nor firm and its affiliates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepts any liabilities for any loss or damage of any kind arising out of any information in this document nor for any actions taken in reliance thereon. Readers are advised to consult the professional for understanding applicability of this newsletter in the respective scenarios. While due care has been taken in preparing this document, the existence of mistakes and omissions herein is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruled out. No part of this document should be distributed or copied (except for personal, non-commercial use) without our written permission. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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