2018 (7) TMI 435 – CESTAT HYDERABAD – TMI – Penalty u/s 78 – suppression of facts – the allegation in the present case is the suppression of the fact inasmuch as the appellant suppressed the true value of the services rendered by them and declared a lower value in ST-3 returns – appellant paid the service tax along with applicable interest as pointed out by the audit even before show cause notice was issued – Held that:- In an identical case in respect of the Cholamandalam MS General Insurance Company Ld., and CESTAT Chennai, [2018 (2) TMI 287 – CESTAT CHENNAI], had held that not reflecting the true value of services rendered in the ST-3 returns accounts to suppression of facts and therefore penalty under Section 78 is imposable – penalty upheld.
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Payment of the differential service tax along with interest before issuance of show cause notice – Held that:- It is now being settled by the Hon’ble Supreme Court in the case of Rajasthan Spinning & Weaving Mills [2009 (5) TMI 15 – SUP
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categories of GTA Service, Manpower Recruitment, Rent-a-Cab etc. During the period 2013-2014, 2014-2015 and 2015-2016, the appellant had short paid the service tax on the services mentioned above, and it was detected by the Department during the course of Audit on scrutiny of their records. The appellant paid the service tax along with applicable interest as pointed out by the audit even before show cause notice was issued. A show cause notice was issued to the assessee demanding the service tax short paid under Section 73 of the Finance Act along with interest under Section 75 and penalty under Section 78 of the Finance Act, 1994. It has been alleged in the show cause notice that the assessee had not correctly declared the value of the services rendered in their ST-3 returns and thereby short paid service tax. The fact of short payment would not have come to the notice of the Department but for the audit of the unit. The assessee had short paid the service tax during the period but h
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d failed to declare the true value of the taxable services in their ST-3 returns and thereby suppressed the facts from the Department. He therefore held that the proviso to Section 73 (1) is invokable. He further held that penalty under Section 78 is imposable as the short payment was a result of suppression of facts by the appellant . 5. Learned Representative of the appellant submits that the difference occurred due to an error in their calculation and there was no intention to evade payment of service tax. As soon as the audit had pointed out the mistake, they had paid the differential service tax along with interest immediately even before the show cause notice was issued to them. He asserted that the service tax is evaded without any malafide intention on his part. He further argued that they had a turnover around four hundred crores and they had no intention to evade a tax of few lakhs of rupees. He therefore argued that the Learned Commissioner (Appeals) had erred in upholding t
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Court of Delhi in the case of Shiva Alloys Pvt. Ltd., [2018-TIOL-988-HC-DEL-CX] in which the Hon ble High Court had held the payment of duty, whether made before or after issuing of show cause notice, is not determinative and relevant factor for deciding whether or not penalty should be imposed. He also relied on the order of the CESTAT, Chennai in the case of Cholamandalam MS General Insurance Company Limited decided by Final Order No. 42719/2017 by CESTAT-Chennai, and it was held as follows: When the value of services is reflected in the statutory returns on the lower side but subsequently stand detected by the Revenue on the higher side, the same leads to inevitable conclusion that such a lower value was being reflected in the statutory records/returns with a malafide intention to evade payment of service tax. If that be so, the benefit of section 80 as contended by the appellants, cannot be extended to them. The provisions of section 73 also makes it clear that in case of suppressi
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. I have considered the arguments of both sides and perused the records. 8. There is no dispute on the facts of the case, that the appellant had declared a lower value in their returns than the actual value of services rendered by them and when this was pointed by the audit, they paid the differential tax along with applicable interest. The only question is of penalty under Section 78. This mandatory penalty is imposable under 5 conditions a) fraud b) collusion c) willful mis-statement d) suppression of facts e) contravention of any provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax. Of these five elements, the allegation in the present case is the suppression of the fact inasmuch as the appellant suppressed the true value of the services rendered by them and declared a lower value in ST-3 returns. I find that in an identical case in respect of the Cholamandalam MS General Insurance Company Ld., and CESTATChennai, had held that not re
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