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TMI Blog2023 (3) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... on to evade payment of Service Tax. In the present case, there are no suppression of facts on the part of the appellant. Delay in payment of Service Tax due to financial hardships cannot always be considered to be suppression of facts. - An assessee who has suppressed figures in their account or issued parallel invoices so as to evade the payment of tax will not be covered under sub-section (3) of Section 73 of the Finance Act, 1994. Here, apart from a vague allegation, there is no evidence that the appellant has suppressed facts with the intent to evade payment of tax. In the case of COMMISSIONER OF SERVICE TAX, SERVICE TAX COMMISSIONERATE VERSUS VEE AAR SECURE [ 2011 (1) TMI 716 - KARNATAKA HIGH COURT] , it was held that when upon being pointed out, the assessee got themselves registered with the Service Tax Department and paid the entire Service Tax with interest, the penalty imposed was unwarranted. The Learned Authorized Representative for the Department has relied upon the decision in the case of M/S. NEBULA COMPUTERS PVT. LTD. VERSUS COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI [ 2023 (2) TMI 897 - CESTAT CHENNAI] . In the said case, the Tribunal has refused to take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest already paid by the appellant. A penalty of Rs.5,000/- was imposed under Section 77 of the Finance Act, 1994 for the delay in filing periodical ST-3 returns. Further, a penalty equal to the amount of Service Tax confirmed was imposed under Section 78 of the Act. The appellant was given an option to pay reduced penalty up to 25% of the Service Tax demanded if the Service Tax and interest was paid by the appellant within 30 days from the date of receipt of the order. Aggrieved by such order, the appellant is now before the Tribunal. 4. Smt. R. Srivishva Priya, Learned Counsel, appeared and argued the matter on behalf of the appellant. She contended that the appellant is not contesting the liability to pay Service Tax and the interest thereon; the contest in the appeal is confined to the penalties imposed under Sections 77 and 78 of the Finance Act, 1994. 4.1 She adverted to sub-Section (3) of Section 73 of the Finance Act, 1994 to argue that since the appellant had paid the Service Tax along with interest upon being pointed out by the audit party, the Department ought not to have issued any Show Cause Notice; the Show Cause Notice has been issued alleging suppression with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with interest only after the inspection by the audit party; they have been making delayed payment of Service Tax and also delay in filing returns, habitually. That the non-payment of Service Tax would never have come to light if the verification had not been done by the audit party. She therefore argued that the penalties imposed are legal and proper. 5.2 To support her contentions, the Learned Authorized Representative for the Department relied upon the decision of the Tribunal in the case of M/s. Nebula Computers Pvt. Ltd. v. Commissioner of G.S.T. Central Excise, Chennai [2023 (2) TMI 897 CESTAT, Chennai]. 5.3 She prayed that the appeal may be dismissed. 6. Heard both sides. 7. The issue to be analysed in the present appeal is whether the penalties imposed under Sections 77 and 78 of the Finance Act, 1994 on the appellant are legal and proper. 8. Sub-section (3) of Section 73 of the Finance Act, 1994 reads as under: - Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person chargeable with the service tax, or the person to whom such tax refund has erroneously been made, may pay the amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .E C. Circular dated 3-10-2007 had clarified as under : - Subject: Issuance of SCNs for levy of penalty in the cases where service tax is paid suo motu by the assessee - Reg. Section 73(1A) of the Finance Act, 1994 provides for conclusion of adjudication proceedings in the cases of willful suppression/fraud/collusion if the taxpayer prays service tax liability along with interest and a penalty equal to 25% of service tax amount, within a period of one month from the date of issue of SCNs. Similarly, Section 73(3) provides conclusion of adjudication proceedings in other cases on payment of service tax and interest. 2. A question has been raised as to whether the conclusion of proceedings in such cases is limited to the action taken under Section 73 of the Act or all proceedings under the Finance Act, 1994, including those under Sections 76, 77 and 78, get concluded. 3. The issue has been examined. The intention of Section 73(1A) has already been explained vide para 8(g) of the post budget instructions issued by TRU vide D.O.F. No. 334/4/2006-TRU, dated 28-2-2006 [2006 (4) S.T.R. C30], wherein it has been clarified that this sub section provides for conclusion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his powers under Section 80 of the Finance Act, after recording proper reasons, it cannot be reopened to enhance the penalty by the Commissioner in the Order-in-Revision. The present situation in the appeal is clearly covered by aforesaid decision. In view of this, we are of the view that the impugned Order-in-Revision has no merit. We set aside the same and restore the order of the Original Authority. The ratio of the aforesaid decision has been followed by this Bench in many of subsequent decisions. Accordingly, we find that the appellants have made out a prima facie case in their favour for non-imposition of penalty under Sections 76, 77 and 78 of the Act. 7. In view of the foregoing reasons, respectfully following the decision of this Bench, we hold that the impugned order as regards imposition of penalty under Sections 76, 77 78 of the Finance Act, 1994 is liable to be set aside and we do so. The appeal is allowed with consequential relief, if any. 12. In the case of Commissioner of Central Excise Service Tax, LTU, Bangalore v. M/s. Adecco Flexione Workforce Solutions Ltd. [2012 (26) S.T.R. 3 (Kar.)], the Hon ble Karnataka High Court has held that Show Cau ..... X X X X Extracts X X X X X X X X Extracts X X X X
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