Southern Erectors (P) Ltd. Versus Commissioner of Service Tax [sought to be changed as CGST & Central Excise, Chennai South Commissionerate Chennai]
Service Tax
2018 (7) TMI 1219 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 18-7-2018
Application No. ST/Misc[CT]/41703/2017 & Appeal No. ST/515/2011 – FINAL ORDER No. 42029 / 2018
Service Tax
Hon'ble Ms. Sulekha Beevi, C.S., Member (Judicial) And Hon'ble Shri Madhu Mohan Damodhar, Member (Technical)
Shri M. Karthikeyan, Advocate For the Appellant
Shri A. Cletus, ADC (AR) For the Respondent
ORDER
Per Bench
The appellants are engaged in providing service under “Erection, Commissioning or Installation Services”. During the course of audit, it was found that during the period 2007-08, the appellants had realized labour charges covering the period from 12/06 to 5/07 during 4/07 July/2007 towards erection, commissioning or installation services rendered to their clients, but had not discharged service tax on such
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eceived by them were barely enough to pay staff / workers and their salaries. Despite this financial crunch, appellant had taken all efforts to realize the payments but could not succeed. When the payments were received, the appellants remitted the same along with interest. The delay in making the payment of service tax was only due to the delay in receiving payments. He points out that the amount of service tax along with interest was paid much before issuance of show cause notice. Only the differential amount as calculated by the department due to change in the rate of service tax from 12.24 % to 12.36% was to be paid. The same was paid within one month after issuance of SCN i.e. 15.11.2008. Thus, appellant had paid the entire service tax liability along with interest before passing of the OIO dt. 13.3.2009. Apart from the allegation that appellant has suppressed facts, there is no evidence to establish that appellant suppressed facts with intention to evade payment of tax. There was
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7) STR 343 (Tri.-Bang.) and argued that penalty is unwarranted when there is mere delay in payment of service tax. The facts put forward before us as well as the records would show that other than delay in payment of service tax, there is no evidence to show that appellant has suppressed facts with intention to evade payment of tax. The figures required for quantification of the demand of service tax has been taken from the accounts maintained by the appellant and there is nothing unearthed by the department to show that there was any positive act of suppression on the part of the assessee. We therefore find this is a fit case for invoking Section 80 of the Finance Act, 1994 as the appellant has put forward reasonable cause for non-payment of service tax during the disputed period. We therefore hold that the penalty imposed under Section 78 is unwarranted and requires to be set aside. The impugned order is modified to the extent of setting aside penalty imposed under Section 78 of the
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