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TMI Blog2019 (3) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... period of limitation and also for imposing penalty under Section 78 of the Finance Act, 1994. Mere inaction to declare what was supposed to be declare d under the law does not lead to suppression of facts. Similarly, mere non-payment of short- payment of duties or taxes cannot be construed as with an intent to evade duties/taxes. There must be something more than mere failure to pay taxes for invoking the provisions of Section 78 ibid. The appellant has shown their bona fide by paying the service tax alongwith interest thereon immediately admitting their unintentional lapse - the authorities below have failed to brought on record any evidence to prove suppression or mala fide intention on the part of the appellant and, therefore, no ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and penalty. 3. I have heard ld. counsel for the appellant and ld. Authorised Representative for the Revenue and perused the record. Ld. counsel for the appellants contended, with support of various case laws, that their case was fit for closure under Section 73(3) of Finance Act, 1994, as they have discharged the entire Service Tax liability with applicable interest before issue of demand notice. He submitted that short payment of service tax occurred due to less Cenvat Credit available in CENVAT Register resulting into short payment but after intimation by the department, the Appellant paid the total amount with interest and in spite of that the department had issued the show cause notice. According to him, during the relevant period, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruary, 2012. The audit was conducted in the month of September, 2015 and the service tax with interest was paid immediately, whereas the show cause notice was issued much later i.e. on 06.05.2016. Section 73(3) of the Finance Act, 1994 specifically provides that if the service tax is paid before the service of notice then the department shall not issue any notice u/s. 73(1) ibid and only if there is any malafide intention or suppression then the benefit of Section 73(3) is not available. The only reason given by the revenue in the show cause notice for invoking the extended period is that but for audit, the subject evasion would have gone undetected and revenue lost forever and that the action of the appellant appears deliberate and intenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er on own assessment or on the basis of what was ascertained by the Central Excise Officer. Sub-section (3) was intended to confer an extended benefit much more in nature than the varying degrees of penalty imposed under the different provisos of sub-section (1) of Section 78. 16. It is true that sub-section (4) of Section 73 keeps the operation of sub-section (3) out of the purview, in cases where the Service Tax has not been levied, paid, short-levied or short-paid by reason of fraud, collusion, willful mis-statement, etc. But nevertheless, the law does not treat all cases of fraud, collusions, willful misstatement, suppression of facts, etc., alike. 17. Keeping this in mind, if we go through the order- in-original, it could be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clare d under the law does not lead to suppression of facts. Similarly, mere non-payment of short- payment of duties or taxes cannot be construed as with an intent to evade duties/taxes. There must be something more than mere failure to pay taxes for invoking the provisions of Section 78 ibid. The culpable state of mind of the assessee needs to be proved absolutely and not by mere references. The appellant has shown their bona fide by paying the service tax alongwith interest thereon immediately admitting their unintentional lapse. Considering the facts involved, I have come to the conclusion that the authorities below have failed to brought on record any evidence to prove suppression or mala fide intention on the part of the appellant and, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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