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TMI Blog2022 (9) TMI 903X X X X Extracts X X X X X X X X Extracts X X X X ..... iven two reasons for non-payment. Firstly, that it had occurred due to clerical mistake committed by the employee, who was handling the service tax and he had passed away. Secondly, that the Finance Manager had also resigned. These reasons have been accepted by the CESTAT. It is relevant to note that upon being pointed out during the audit, the assessee has promptly made the payment of tax with interest and requested not to issue any show-cause notice. In order to reverse the decision of the CESTAT, nothing is pointed out from the record to demonstrate that there was either fraud or collusion or willful mis-statement or suppression of facts or contravention of any of the provisions of the Act and Rules. In the absence of the conditions cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f service tax and education cess, provided such assessee does not avail of CENVAT credit on duty paid inputs or capital goods or CENVAT credit service tax on the services utilized for providing convention service under the provisions of CENVAT Credit Rules, 2004 ('Cenvat Rules'); or assessee does not avail the benefits under Notification No.12/2003 dated 20.06.2003. 3. During the audit, it was observed that assessee was availing the CENVAT credit of service tax and not eligible to avail the benefit of abatement under Notification No.1/2006 and thus, it was noticed that assessee had short paid the service tax of Rs.51,65,268/-. After deducting the service tax paid, assessee was liable to pay total short paid service tax of Rs.41,13, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue imposed penalty of Rs.1,27,80,168 equivalent to the amount of unpaid Service tax, under Section 78 of the Act, vide Order-in-original dated 30.11.2012 passed by the Commissioner (Adjudication). 8. Assessee challenged the Order-in-original before the CESTAT (Customs, Excise & Service Tax Appellate Tribunal), Bengaluru. By the impugned order, the CESTAT following a decision of Delhi High Court and a decision of this Court, set aside the penalty. 9. Shri. Deshpande for the Revenue, vehemently contended that assessee had evaded tax and justified imposition of penalty. 10. Shri. Prabhakar Rao learned Advocate for the assessee, submitted that assessee had not willfully evaded the tax. The short payment had occurred due to the clerical mis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f C.Ex.(Adjudication) (2018) TIOL 178 HC Del ST=(2018) 12 GSTL 368 wherein, it is held that the conduct of appellant therein, of making prompt payment of service tax during the enquiry after gaining the knowledge of its liability, is sufficient reason to believe that assessee did not have an intention to evade payment of tax and accordingly, penalty was set aside. 15. In United Communication, the facts are slightly different. The assessee therein, was a Cable operator and registered under Service tax. During the enquiry by the Revenue, he gave information about the number of subscribers, the amount charged, etc., and offered to pay the differential amount. A communication was sent to him stating that he was liable to pay Service tax and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) E.L.T. 3(S.C). In para 19, it is stated that 'penalty' under Section 11AC is punishment for an act of deliberate deception by the assessee with the intent to avoid duty by adopting any of the means mentioned in the Section. It is also relevant to note that the Apex Court has held thus: "21. From the above, we fail to see how the decision in Dharmendra Textile can be said to hold that Section 11AC would apply to every case of non-payment or short payment of duty regardless of conditions expressly mentioned in the Section for its application." 17. A careful reading of the above shows that, as per UOI Vs. Dharmendra Textile Processors (2008) 231 ELT 3 (SC), once the Section is applicable, the concerned authority would ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the employee, who was handling the service tax and he had passed away. Secondly, that the Finance Manager had also resigned. These reasons have been accepted by the CESTAT. It is relevant to note that upon being pointed out during the audit, the assessee has promptly made the payment of tax with interest and requested not to issue any show-cause notice. 23. In order to reverse the decision of the CESTAT, nothing is pointed out from the record to demonstrate that there was either fraud or collusion or willful mis-statement or suppression of facts or contravention of any of the provisions of the Act and Rules. 24. Further, the CESTAT has followed the decision of Delhi High Court in assessee's own case and also the decision of this Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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