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TMI Blog2017 (10) TMI 899X X X X Extracts X X X X X X X X Extracts X X X X ..... der, 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. Service tax alongwith interest paid before issuance of SCN - 73(3) of the Finance Act, 1994 - Held that: - 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 already held that non-payment in the present case was on account of suppression and with malafide, the provisions of section 73 (3) would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were initiated against them by way of issuance of show-cause notice dated 12.04.2011, which resulted in passing of an order by the original adjudicating authority. Vide his impugned order, the adjudicating authority confirmed the demand of ₹ 34,86,966/- and as the appellant had already deposited an amount of ₹ 26,03,367/- and interest of ₹ 6,98,079/- he appropriated the same. In addition, penalty was also imposed under section 78 of the Act. 3. Being aggrieved with the said order, the appellant filed an appeal before Commissioner (Appeals) on the sole ground that inasmuch as they have deposited the service tax before issuance of the show-cause notice, along with interest, no proceedings should have been initiated agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to why the value of the services were not being disclosed correctly in their ST3 returns except a feeble effort on their part to show that as the said failure has occurred on account of non-receipt of payment from the customers. 6. Section 78 of the Finance Act, 1994 provides for imposition of penalty for suppression of the value of taxable services. It clearly lays down that where any service tax has not been levied or paid as has been short-levied or short-paid by reason of fraud; collusion; willful mis-statement; suppression of acts; or contravention of any provisions with an intent to evade payment of service tax shall also be liable to pay the penalty, which shall not be less that the amount of service tax evaded. The proviso to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipt of compensation from the clients. The appellant has not placed any evidence on record to show that they had not received the value of the said services from their customers for such a long period. Even otherwise, I find that 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. As such, I hold that they are liable to penalty under section 78 of the Finance Act, 1994. 7. Learned advocated has contended that inasmuch as, they had paid the service tax al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to believe that the service tax was not required to be paid. Accordingly, I hold that the said section is also not applicable to them. 9. Similarly, the appellant's claim to reduce the penalty to 25% in terms of the proviso to section 78 can also not to be appreciated inasmuch as, the benefit of reduced penalty can be extended only if the entire service tax along with interest and along with 25% penalty is deposited within 30 days of the passing of the order of determination of service tax. Learned advocate fairly agreed that such penalty to the extent of 25% has not been deposited by them. In such a scenario, benefit cannot be extended. 10. For the foregoing reasons, I find no merit in the appellant's contention to set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X
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