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TMI Blog2018 (11) TMI 1927X X X X Extracts X X X X X X X X Extracts X X X X ..... rsed and borne by the assessee manufacturers receiving transport service which fact has also been appreciated by the Ld. Commissioner in the impugned Original Order. When service tax amount has been deposited before the Show Cause Notice, no penalty should be imposed in view of the law as laid down by the Hon ble Karnataka High Court in case of COMMISSIONER OF C. EX., BANGALORE-II VERSUS PUSHPADEEP ENTERPRISES [ 2012 (10) TMI 496 - KARNATAKA HIGH COURT ] relied upon by the assessee, which is squarely applicable to the facts of the present case. There are also force in the argument of the assessee that in terms of the provisions of Section 80 of the Act, they are entitled to full waiver of penalty under Section 78 as well as Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansportation of goods by road ( GTA service ) on which service tax was made leviable under the provisions of the Finance Act, 1994, as amended, ( the Act ) under reverse charge mechanism w.e.f. 1st January 2005 onwards. As per the law, the specified category of assessee (companies and partnership firms) receiving taxable service under the category of GTA service were made liable to pay tax directly to the credit of Central Government, instead of payment by the service provider i.e. goods transport agencies. The issue relating to applicability of service tax on GTA service is not in dispute in the present case. 3. During the period in dispute, i.e. January 2005 to March 2007, service tax amount was being reimbursed to the goods transport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... completely new as it was introduced in the January 2005 which is the period in dispute herein. Entire payment of service tax has been made before the issuance of Show Cause Notice, either through the goods transport agencies or by the assessee themselves of the remaining amount. Though the payment has been made belatedly, in the course of enquiry initiated by the Department, they have also paid applicable interest. There is no evidence on record to show that there was an element of fraud or wilful suppression inasmuch as all the payments of the freight amount with service tax charged thereon were duly recorded in the books of accounts. He emphasised that since the service tax amount was already paid through the transporters, they could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice tax during the period in dispute under the aforesaid circumstances. 6. Ld. Departmental Representative (DR) supports the findings made by the Ld. Commissioner in the impugned adjudication order inasmuch as penalty u/s 78 is concerned. He, however, stated that penalty under the provisions of Section 76 of the Act were also imposable on the assessee, alongwith penalty u/s 77 on the concerned transporters who rendered GTA service to the assessee, for which the Revenue has filed the appeals. In the said Department appeals, the assessees have filed Cross Objections wherein, amongst other grounds, they have contended that penalty is not imposable when the tax amount has been deposited before issuance of the Show Cause Notice. 7. We hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icable to the facts of the present case. We also find force in the argument of the assessee that in terms of the provisions of Section 80 of the Act, they are entitled to full waiver of penalty under Section 78 as well as Section 76 and 77 of the Act, inasmuch there was a reasonable case for non payment of tax as the very levy of service tax on GTA service under reverse charge was a new concept. In view of the above, we do not find any reason to burden the assessee with penalty under Section 78 of the Act and the same is therefore set aside. On the same count, since penalty under Section 76 and 77 are not imposable, the appeals filed by the Revenue are rejected being devoid of any merits. Cross objections filed by the assessee also stand di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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