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TMI Blog2023 (9) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... chequer. The issue of penalty came up for the consideration before the High Court of Karnataka in the case of COMMISSIONER OF SERVICE TAX, BANGALORE VERSUS MASTER KLEEN [ 2011 (9) TMI 788 - KARNATAKA HIGH COURT] where it was held that It is unfortunate that inspite of statutory provisions, the authorities have issued a show cause notice claiming penalty. So, tax and interest was paid before issue of show cause notice. Therefore, the Tribunal was justified in setting aside those orders. As the said order is strictly in accordance with law we do not find any legal infirmity that calls for interference. It is found that the same reasons apply even for invoking the larger period since other than mere alleging suppression, no documentary evidence is placed on record - the Show Cause Notice is therefore clearly issued only for levying penalty and to this extent, the above decision of the Hon ble High Court of Karnataka in M/s. Adecco Flexione Workforce Solutions Ltd. squarely applies. The demand for the normal period alone upheld - appeal disposed off. - HON BLE MR. P. DINESHA, MEMBER (JUDICIAL) And HON BLE MR. M. AJIT KUMAR, MEMBER (TECHNICAL) Shri Joseph Prabakar, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aced on record that the appellant filed a detailed reply incorporating various defence to justify non-payment of Service Tax and also by relying on decisions of various higher judicious fora, but however, the original authority vide Order-in-Original No. LTU/061/2013-ADC(LTU) dated 18.03.2013 proceeded to confirm the demand as well as appropriation, as proposed in the Show Cause Notice. 5. Insofar as the limitation and the suppression of facts is concerned, the officer has recorded the plea of the assessee that there was enough scope for doubt as to the chargeability and that the issue involved intricate interpretation of legal provisions and hence the larger period could not be invoked, for which reason, no penalty could be imposed. The original authority has, however, held that the assessee nowhere demonstrated a reasonable cause for its failure to remit Service Tax and that if the issue involved intricate interpretation of the legal provisions, they should have sought clarifications regarding the same. Further the fact that they did not disclose their activities in their S.T.-3 returns also clarifies about the intention. 6. Aggrieved by the above order, the assessee filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levied since there was no loss to the exchequer. The relevant paragraphs of the above judgement are reproduced below: - 3. Unfortunately the assessing authority as well as the appellate authority seem to think. If an assessee does not pay the tax within the stipulated time and regularly pays tax after the due date with interest. It is something which is not pardonable in law. Though the law does not say so, authorities working under the law seem to think otherwise and thus they are wasting that valuable time in proceeding against persons who are paying service tax with interest promptly. They are paid salary to act in accordance with law and to initiate proceedings against defaulters who have not paid service tax and interest in spite of service of notice calling upon them to make payment and certainly not to harass and initiate proceedings against persons who are paying tax with interest for delayed payment. It is high time, the authorities will change their attitude towards these tax payers, understanding the object with which this enactment is passed and also keep in mind the express provision as contained in sub-sec. (3) of Sec. 73. The Parliament has expressly stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... planation 2 to sub- section (3) of Section 73 of the Finance Act, 1994. 9. Hon ble Karnataka High Court in the case of CCE ST, LTU, Bangalore v. Adecco Flexione Workforce Solutions Ltd. - 2011-TIOL-635-HC-KAR-ST = 2012 (26) S.T.R. 3 (Kar.) has upheld the ratio that in case the entire amount of Service Tax liability, interest thereon stands paid by the appellant before issuance of show cause notice, hence provisions of Section 73(3) of the Finance Act, 1994 should be made applicable and no show cause notice should have been issued. This judgment has been followed by this Tribunal in the case of M.R. Coatings Pvt. Ltd. v. CCE, Rajkot - 2013 (30) S.T.R. 76 (Tri.-Ahmd.). 10. The issue of penalty came up for the consideration before the High Court of Karnataka in the case of Commissioner of Service Tax, Bangalore v. Master Kleen - 2012 (25) S.T.R. 439 (Kar.). The ratio from the judgment of Hon ble High Court in the case of Master Kleen is reproduced below :- The Revenue has preferred this appeal against the order passed by the Tribunal [2010 (17) S.T.R. 365 (Tribunal)] setting aside the orders passed by the lower authorities, imposing penalty under Section 76 of the Fina ..... X X X X Extracts X X X X X X X X Extracts X X X X
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