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TMI Blog2018 (6) TMI 1084X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant has paid the duty along with interest at least three years before the issuance of Show Cause Notice, the demand of penalty equal to 15% imposed under 2nd proviso to Section 78 of the Act is bad and unsustainable. So also the fact that the appellant had obtained registration prior to the Show Cause Notice, the same is sufficient reason to hold there was no violation or contravention of Section 77(2). Appeal allowed - decided in favor of appellant. - Appeal No. ST/42346/2017 - Final Order No. 41843 / 2018 - Dated:- 20-6-2018 - Shri P Dinesha, Member ( Judicial ) Shri Ayyamperumal P, Advocate for the Appellant Smt. P. Hemavathi, Comm r ( AR ) for the Respondent ORDER This is an appeal filed by the assessee b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not be demanded from them under proviso to Section 73(1) of the Finance Act, 1994; (iii) the amount of ₹ 64,189/- collected as Service Tax in excess on Room Rent as shown in Table I should not be demanded from them under Section 73A(3) of the Finance Act, 1994; (iv) the amount of ₹ 22,419/- collected as Service Tax on Food Bills from 01/07/2011 to 31/03/2012 as shown in Table II above, should not be demanded from them under Section 73A(3) of the Finance Act, 1994; (v) Service tax amount of ₹ 8,60,864/- paid on 31/08/2012 by them as shown in Table IV above should not be appropriated against the amounts demanded at (ii), (ii) (iv) above (vi) appropriate interest on the amount demanded at Sl. No. (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Service Tax, appropriated the amount paid towards duty and interest, imposed penalty of ₹ 10,000/- under Section 77(2) of the Finance Act, 1994 and a penalty of ₹ 1,29,103/- under Section 78 proviso (i) of the Finance Act, 1994, on the appellant. The appellant preferred an appeal against the levy on the ground that the imposition of penalty at 15% under 2nd proviso to Section 78, on the ground that the appellant had paid tax and interest much before the issuance of Show Cause Notice (SCN) with a further contention that the larger period was not invocable, since there was no suppression on the part of appellant. The Ld. Commissioner (Appeals), however, vide order dated 14.09.2017 upheld the penalty imposed under 2nd proviso to S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aring. In the case of Sri Velmurugan Sago Factory Vs. Commissioner of C. Ex., Salem reported in 2017 (347) E.L.T. 185 (Tri.-Chennai), this very Bench of the Tribunal was considering an identical issue, but with regard to the demand of penalty under Section 11AC of the Central Excise Act, 1944, and after a careful analysis of Section 112B, has concluded as under: 6. This being the case, it would have been most appropriate if the SCNs had not been issued in these cases. Instead, these appellants perforce have been required to come before this forum for relief. In the circumstances, while there is no two opinion that the differential duty has been discharged by the appellant on being pointed out, along with interest amounts thereon, issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ST., LTU, Bangalore v. ADECCO Flexione Work Force Solutions Ltd. 2012 (26) S.T.R. 3 (Kar.). The decision in the case of First Flight Couriers was on a different footing because the appellant therein did not pay Service Tax and also did not file return on the ground that there was a strike by the employees of that appellant. It was not a case of bona fide error or doubt regarding legal provisions and prompt payment when short payment was pointed out by audit as is the case in this appeal. 8. The facts of the present case are more similar to that in the case of ADECCO Flexione Work Force Solutions Ltd. (supra). So considering this decision of Hon. Karnataka High Court, I set aside the penalty imposed on the appellant. Thus the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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