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TMI Blog2018 (8) TMI 423X X X X Extracts X X X X X X X X Extracts X X X X ..... SHRIDHAR CASTINGS PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE & CUSTOMS, NAGPUR [2015 (7) TMI 33 - CESTAT MUMBAI], where it was held that penalty in such cases should be set aside by referring Section 73(3) of the Finance Act, 1994, which provides for closure of all proceedings in a case where service tax liability along with interest is discharged by the appellant on his own or on being pointed out by the department - penalty is not warranted. Appeal allowed - decided in favor of appellant. - Application No. ST/Misc[CT]/41144/2017 Appeal No.: ST/00144/2012 - Final Order No. 42192 / 2018 - Dated:- 6-8-2018 - Hon ble Ms. Sulekha Beevi C.S., Member (Judicial) And Hon ble Shri Madhu Mohan Damodhar, Member (Technical) Ms. L. Maithi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruary, 2009 to December, 2009, the appellant was unable to discharge service tax promptly due to breakdown of administrative machinery coupled with severe financial crisis due to non-receipt of service charges. Howsoever, as soon as the appellant could arrange for funds, they discharged the entire service tax along with interest of ₹ 4,12,733/-. In the meanwhile, the Department has issued the Show Cause Notice for the whole amount for the period February, 2009 to December, 2009 and also imposing penalties from the date of receipt of the Show Cause Notice. The appellant had already paid a sum of ₹ 49,10,998/- along with interest. A balance amount of ₹ 12,02,174/- was paid prior to adjudication. Show Cause Notice has been is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o evade payment of service tax. 3.2 That they have not filed ST-3 returns and therefore, the ingredients of Section 78 are attracted and the penalty imposed is legal and proper. 4. Heard both sides. 5.1 The appellant is contesting only the equal penalty imposed under Section 78 of the Finance Act, 1994. In page 29 of the Appeal Memorandum, the appellants give the details of the payments made, which is reproduced as under : Date Service Tax (in Rs.) Interest (in Rs.) Remarks -- 1,23,267/- Through CENVAT Credit 1-6-2009 3,00,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... short payment was because of financial shortage of funds and due to administrative difficulties. It is her case that in the Manpower Supply Recruitment Services, there is much problem of receiving the payments in due time and therefore, the appellants could not discharge the service tax within time. That on being pointed out, the appellant has made all efforts to raise funds and pay up the entire service tax liability. The Hon ble High Court of Hyderabad for the State of Telangana and the State of Andhra Pradesh in the case of M/s. Tirupathi Fuels Pvt. Ltd. (supra) has observed that the law does not treat all cases of suppression of facts alike. This indicates that when the short payment is due to some wilful act of suppression, fraud or c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lf, in our view, is a reasonable cause to invoke the provisions of Section 80 ibid. for waiver of any remaining penalties that may have been issued by the adjudicating authority. The Ld. AR had argued that financial hardship cannot be taken as a reasonable cause for the purposes of Section 80. In the peculiar facts of this case, the appellants, for the disputed period, were always one step behind in paying up their tax liabilities, since they were paying up the arrears built up for the previous periods. This is the fact which has been taken cognizance of and found correct by the adjudicating authority also. The Department has also not called any evidence that the appellant had sufficient financial reserves and were not monetarily strained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 78 would be applicable and the assessee gets concession in paying 25% of duty as penalty if such payment is made promptly. The argument raised by Revenue can be canvassed even in a situation wherein an assessee pays both tax and interest before issue of SCN. That is, the interpretation canvassed by Revenue is to the effect that anybody who pays Service Tax along with interest before issue of SCN will be liable to pay penalty under Section 76 putting such assessees at a disadvantageous position as compared to an assessee who does not make payments at all before issue of SCN. No benefit would accrue to an assessee who makes such payment if this argument is accepted. C.B.E. C. vide letter F. No. 137/167/2006-CX-4, dated 3-10-2007 ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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