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TMI Blog2016 (6) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... on for providing services of Storage and Warehousing to various industries. They were collecting storage charges, insurance charges, handling charges and miscellaneous charges from their customers for storage of goods at their public bonded warehouse and paying service tax from February 2006 onwards. During the course of audit by the department, it was noticed that appellant had not paid the service tax for the period from Sept'2008 to Dec'2009. Hence proceedings were initiated and a show cause notice dt. 10.8.2010 was issued demanding Rs. 25,51,403/- under Section 73 (2) read with Section 73 (1) of the Finance Act along with interest, proposing appropriation of amounts already paid towards the demand and also proposing imposition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Finance Act. Ld. counsel submits that collection of tax from customers had been accounted in the books of accounts of appellant-company and there has been no deliberate intention to suppress or evade payment of tax. He submits that in this case, provision of Section 73 (3) of the Act is only applicable and not Section 73 (1). He submits that there are number of decisions of Tribunal and higher courts to the effect in cases of discharging the tax/ duty liability either on their own by assessee or on being pointed by audit before issuance of SCN, invocation of longer period is not invokable to impose equal penalty. He relied on the following case laws :- (1) CCE Bangalore Vs Geneva Fine Punch Enclosures Ltd.-2011 (267) ELT 481 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax, or the person to whom such tax refund has erroneously been made, may pay the amount of such service tax, chargeable or erroneously refunded, on the basis of his own ascertainment thereof, or on the basis of tax ascertained by a Central Excise Officer before service of notice on him under sub-section (1) in respect of such service tax, and inform the Central Excise Officer of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the amount so paid : Provided that the Central Excise Officer may determine the amount of short-payment of service tax or erroneously refunded service tax, if any, which in his opinion has not been paid by such person and, then, the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 19994 is invokable for the demand of service tax, Education Cess and Secondary & Higher Education Cess not paid. Whereas, it appears that assessee having failed to pay to the credit of the Central Government within the stipulated period the above said service tax that is liable for payment in accordance with the provisions of Section 68 or rules made thereunder, rendered themselves liable for payment of interest as applicable in terms of Section 75 of the Act." A reading of the above makes it evident that the only allegation is that the fact of non-payment of tax came to the notice of the department only on account of audit of appellants accounts. This alone is not sufficient warranting invocation of penalty under section 78 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 78 of the Act. This is clearly an erroneous finding as the penalty under section 78 can be imposed only under the circumstances mentioned in the section as extracted above. 6. The show cause notice is the very foundation in any proceedings. What is not alleged in the show cause notice, cannot be traversed at a later point of time in any proceedings as held by the Hon'ble Supreme Court in the case of the CCE, Nagpur Vs Ballarpur Industries Ltd. reported in 2007 (215) ELT 489 (S.C). The penalty under section 78 of the Finance Act is unsustainable is proved by the judgment of the Tribunal in the case of CST, New Delhi Vs Independent News Services P.Ltd. reported in 2011 (23) STR 23 (Tri-Del). Accordingly, the penalty imposed under section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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