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TMI Blog2017 (10) TMI 662X X X X Extracts X X X X X X X X Extracts X X X X ..... he present appeal. The said non-payment was detected by the department on investigations made against them. It cannot be held that such non-payment of service tax or even non-disclosure of the value of the same in the return was on account of the non-receipt of compensation from the clients as they were collecting service tax from their customers, Even otherwise, the payment of service tax is the legal obligation of the service provider, irrespective of the fact of receipt of value of the service from service recipient All these factors lead to an inevitable conclusion that there was malafide on the part of the appellant to suppress the value of the services and not to pay service tax on the same - penalty u/s 78 upheld. Appeal dismissed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicating authority vide above order confirmed the demand of Service Tax of ₹ 4,96,629/- and ₹ 8,84,648/- for the period 2009-10 to 2010-11 and 04/2012 to 12/2012 respectively under Section 73 of the Finance Act, 1994, Interest under Section 75 and imposed penalty of ₹ 13,81,277/- under Section 78 ibid besides appropriating service tax of ₹ 8,84,648/- and interest of ₹ 38,699/- already paid and also demanded late fee under Rule 7(c) of Service Tax Rules, 1994 read with section 70 of the Finance Act, 1994. The appeal against the said order did not succeed before Commissioner (Appeals) and hence the present appeal. 3. I have accordingly heard Shri N. Viswanathan, learned advocated for the appellants and heard S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the financial benefits. He also submits that this is a clear case of malafide, thus invocation of the penal provisions is justified. Section 73 (3) is applicable only in those cases where there is no malafide or suppression or misstatement etc., with an intention to evade payment of duty. As in the present case, the appellants have collected service tax from their customers but were not depositing with the exchequer, nor even intimating the Revenue about their liability to pay, it is a clear case of malafide, suppression, mis-statement etc. 6. After appreciating the submissions made by both sides, I find that there is no dispute on the facts that the assessee is under a legal obligation to file the requisite returns provided under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evade payment of duty would be liable to equal amount of penalty. 7.2 The question required to be decided in the present appeal is whether such non-payment of service tax by the appellant was on account any one of the ingredients mentioned in the said Section 78. As already observed, the appellant was registered and was paying service tax but for the period involved in the present appeal. The said non-payment was detected by the department on investigations made against them. It cannot be held that such non-payment of service tax or even non-disclosure of the value of the same in the return was on account of the non-receipt of compensation from the clients as they were collecting service tax from their customers, Even otherwise, I find t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the basis of tax ascertained by a Central Excise officer, before the service of the notice on him, the requirement of serving any show-cause notice gets diluted and the same is not required to be issued. However, sub-section 4 of Section 73 is to the effect that sub-section 3 shall not apply in a case where service tax has not been levied or paid on account of fraud; willful mis-statement; or suppression of facts. As I have already held that non-payment in the present case was on account of suppression and with malafide, the provisions of Section 73 (3) would not get attracted. 9. 1 For the above proposition, I refer to and relied upon the Hon'ble Supreme Court's decision in the case of Rajasthan Spinning Mills (supra) report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so not applicable to them. 10.1 The Tribunal in case of Inma International Security Academy P. Ltd. Vs Commissioner of Central Excise, Chennai reported as 2006 (1) S.T.R. 289 (Tri.-Chennai) has observed as under:- After giving careful consideration to the submissions, I find that the only reason stated by the assessee in their reply to the show-cause notice for the delay of payments of service tax, is financial crisis. Financial crisis is a universal plea, which could be made by any assessee. If it is accepted as coming within the meaning of the expression reasonable cause under Section 80 ibid, the penal provisions of Section 76 to 79 of the Finance Act will be just dead letters this cannot be the legislative intent. Hence fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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