2018 (11) TMI 1149 – CESTAT CHENNAI – TMI – Penalties u/s 76, 77 and 78 of FA – Non-payment of Service Tax – appellant had collected service tax but had not remitted the same to the Government Account – no intent to evade – Held that:- In the present case, facts indicate strongly that the non-payment was due to the financial difficulties. It is also brought out that appellant was burdened with payment of wages to the manpower supplied even though delayed amount / no amount was received from airlines. The amounts received from the customers were always less than the amounts to be spent by them and the difference was to be arranged through loan. The secured loans increased from 11.62 crores in April 2008 to 12.46 crores in March 2009 and unsecured loans increased from ₹ 76.67 lakhs to ₹ 97.78 lakhs; that sundry debtors have gone up from 4.43 crores to 7.56 crores during the same period. They furnished documents to establish these facts.
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The delay / non-payment of serv
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0, the appellant had collected service tax but had not remitted the same to the Government Account. It was also noticed that they had delayed the payment of service tax for earlier period from October 2007 to March 2008. Show cause notices were issued to the appellant demanding service tax along with interest and also for imposing penalty. After due process of law, the original authority confirmed the demand, interest and imposed penalties. In appeal No. ST/555/2011, penalty under section 78 of the Finance Act is imposed whereas in Appeal Nos. ST/68 & 69/2012, penalty under section 76 is imposed. Aggrieved, the appellant is now before the Tribunal. 2. The ld. counsel Shri G.Natarajan submitted that the appellant is contesting only the penalties imposed in all the appeals.. He argued that there was no intention to evade payment of service tax and non-payment of service and the delayed payment of service tax was only due to financial crisis. Appellants are engaged in supply of manpow
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rtment to recover their dues from M/s. Indian Airlines and M/s. Kingfisher Airlines who owes major sums to the appellant. Thus, he explained that the non-payment of service tax was only due to such delayed receipt of amounts and non-receipt of amounts from certain airlines. He prayed that Section 80 of the Finance Act may be invoked to set aside the penalties. He relied upon the decision of the Tribunal vide Final Order No. 41943/2018 dated 28.6.2018 in the case of Dusters total Solutions Pvt. Ltd. Vs. Commissioner of GST & Central Excise, Chennai. 3. The ld. AR Shri K. Veerabhadra Reddy supported the findings in the impugned order. He submitted that the appellant has collected the service tax and has not paid it to the Central Government. Therefore, they are guilty of suppression of facts and therefore penalty imposed under section 78 in Appeal No. ST/555/2011 is legal and proper. So also they have delayed the payment of service tax and therefore they are liable to penalty under s
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in 2018 (8) TMI 423, the penalty imposed under section 78 was set aside on the ground that the appellant has put forward reasonable cause for non-payment of service, which was due to financial hardship. In the present case, facts indicate strongly that the non-payment was due to the financial difficulties. It is also brought out that appellant was burdened with payment of wages to the manpower supplied even though delayed amount / no amount was received from airlines. The amounts received from the customers were always less than the amounts to be spent by them and the difference was to be arranged through loan. The secured loans increased from 11.62 crores in April 2008 to 12.46 crores in March 2009 and unsecured loans increased from ₹ 76.67 lakhs to ₹ 97.78 lakhs; that sundry debtors have gone up from 4.43 crores to 7.56 crores during the same period. They furnished documents to establish these facts. Thus the delay / non-payment of service tax cannot be said, is an act o
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