2019 (6) TMI 19

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..... vade payment of service tax and that it was only a case of mere delay in paying up the tax on account of delay in receiving the payments from their clients. In the present case also, the appellant has been reflecting the tax liability in their ST-3 returns. They could not pay up the tax only because they did not receive the payments from their clients within proper time. We find that the appellant has put forward reasonable cause for the delay in paying the service tax and hence, this is a fit case for invoking Section 80 of the Finance Act, 1994. The penalty under Section 76 ibid is unwarranted - the impugned Order is modified to the extent of setting aside the penalty imposed under Section 76 only, without disturbing the duty demand .....

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..... was not a case of wilful non-payment or short payment. There were several pending payments from the appellant s clients because of which the appellant was unable to meet its day-to-day financial needs. A huge amount of ₹ 1,08,43,740/- was due as refund from the Income Tax Department. The appellant, being a small company, was financially burdened due to such reasons. The delay in payment of service tax was due to such financial constraints and it was not a case of wilful evasion of service tax. 3.2 She stressed that the appellant had filed regular ST-3 returns and made full disclosure of the due of service tax in their ST-3 returns. Being a case of belated payment, she pleaded that the penalty imposed under Section 76 ib .....

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..... their grievance with regard to the cause for delay in payment of service tax. They were under much financial hardships and were not getting the payments from the clients within proper time. Further, they were also to get huge refunds from the Income Tax Department. It can be understood that the appellant, during the relevant period, was undergoing much financial stress and therefore, could not deposit the service tax to the Government. In fact, they have filed proper ST-3 returns reflecting their service tax liability. This would show that the appellants had no intention to evade payment of service tax and that it was only a case of mere delay in paying up the tax on account of delay in receiving the payments from their clients. .....

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