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TMI Blog2017 (4) TMI 945X X X X Extracts X X X X X X X X Extracts X X X X ..... e said service nor disclosed the amount paid in their ST-3 returns. On being pointed out by audit, the appellant paid an amount of Rs. 20,48,335/- towards service tax along with interest of Rs. 10,09,748/- and Rs. 766/-. Thereafter, a Show Cause Notice was issued to the appellant on 17.10.2012 proposing to impose penalty under Section 78 alleging suppression of facts/willful mis-statement. 3. After due process of law, the original authority confirmed the demand with interest, appropriated the amounts already paid by the assessee and imposed penalty of Rs. 10,000/- under Section 77 of the Finance Act, 1994 and equal amount of penalty of Rs. 20,48,335/- under Section 78 of the Finance Act, 1994 giving an option to pay reduced penalty of 25% (Rs.5,12,084/-) in case the service tax and interest is paid within 30 days of communication of the order. The appellant filed appeal before the Commissioner (Appeals) being aggrieved by the penalties imposed. The Commissioner (Appeals), vide order impugned herein, set aside the penalty imposed under Section 77 of the Finance Act, 1994. In regard to the penalty imposed under Section 78 it was observed by the Commissioner (Appeals) that the same h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., Vs. CCE, Pune-III [2015 (38) STR 1200 (Tri. - Mumbai)]. The Ld. Counsel submitted that in these cases the Tribunal has set aside the penalty imposed when the show cause notices were issued invoking extended period on the ground that the issue whether assessee is liable to pay service tax under Section 66A was contentious during the relevant period. iv) The judgments in the case of CCE & ST. LTU, Bangalore Vs. Adecco Flexione Workforce Solutions Ltd., [2012 (26) STR 3 (Kar.)] was relied upon by the Ld. Counsel to submit that when the assesee has paid the service tax along with interest no show cause notice can be issued by the Department in terms of sub-Section (3) of Section 73 of the Finance Act, 1994. The Ld. Counsel therefore contended that as the amount was paid even before issuance of show cause notice no penalties can be imposed, that the penalty imposed under Section 73(4A) is wrong and no penalty can be imposed under Section 78 as the appellant had not paid the service only on bonafide belief that the services are not taxable. 5. On behalf of the Department, the Ld. AR, Sh. Nagraj Naik submitted that the Commissioner (Appeals) has observed in para 5 of the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 73(4A) because the short payment was pointed out by audit party and appellant had immediately paid the same. Thus he took the view that penalty under Section 78 is not applicable since assessee maintained true and correct details of transactions. The contention of the Department is that the assessee by not taking registration for Management and Maintenance or Repair services received from foreign service provider and by not disclosing the value of the said service in their returns are guilty of suppression of facts and are liable to pay penalty under Section 78 of the Finance Act, 1994. 8. The original authority had imposed equal penalty under Section 78 of Finance Act, 1994. However, Commissioner (Appeals) observed that since the assessee had paid service tax along with interest pursuant to audit, Section 73(4A) would apply and the penalty stated in this Section alone would be attracted. For better appreciation Section 73(4A) as it stood prior to amendment 28.04.2012 is reproduced as below: Section 73(4A) Notwithstanding anything contained in sub-Section (3) and (4), where during the course of any audit, investigation or verification, it is found that any service tax h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of Rs. 2.15 lakhs which was also paid off after issuance of show cause notice. At this juncture, we find that the contest in the appeal before us is only for the penalty imposed and as upheld. We find from the records that the appellants conduct prior and post to the period in question by discharging his service tax liability in time was being of a good assessee. There could be a bona fide error on the appellant's part of not declaring the amount of Rs. 3.05 crores as the commission received in the ST return, but it is also undisputed that the said amount has been declared in the balance sheet as receipts. In our view, this plea of the appellant that there was a bona fide error in not recording the amount in the ST-3 return is seems to be acceptable. In the facts and circumstances of this case, by invoking the provisions of Section 80 of Finance Act, 1994, we set aside the penalty imposed by the adjudicating authority under Section 78 of Finance Act, 1994. 11. Following the said decisions, I am of the view that in the given set of facts, suppression of facts cannot be alleged on mere non-declaration in the returns when the issue whether service tax is payable on the said ..... X X X X Extracts X X X X X X X X Extracts X X X X
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