2018 (11) TMI 1464 – CESTAT CHENNAI – TMI – Penalties u/s 76 and 78 of FA – Short payment of service tax – service tax paid belatedly for the period from April 2006 to June 2008 – Held that:- On perusal of the documents such as the list of sundry debtors etc., it is seen that there was huge amount pending as receivables. So also they had to meet expenses for salary, accident compensation of employees provided under manpower supply service – The department does not have a case that any of the transactions were unaccounted or that they had been indulging in a parallel accounting.
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It is commonly understood that the employees supplied through manpower supply service have to be given the salaries within due time. If the service receivers delay the payment, it would cause much hardship to the service provider as they have to make the statutory payments such EPF, ESI etc. to the Government – the appellant has put forward reasonable cause for not paying the service tax within due time a
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returns during the said periods. Show cause notices were issued proposing to demand service tax along with interest and also for imposing penalties. After adjudication, the original authority confirmed the demands in both the show cause notices vide the impugned orders in original and imposed penalties. Aggrieved, the appellants are now before the Tribunal. 2. On behalf of the appellant, ld. consultant Shri S. Jayanth submitted that the appellant is contesting only the penalties imposed in both these appeals. It is submitted by him that in Appeal No. ST/300/2012, penalty under section 76 is imposed whereas in Appeal No. ST/301/2012, penalty under section 78 has been imposed. The appellant was providing manpower supply service and during the relevant period was under much financial constraints. All the transactions were billed and accounted for in the income tax returns and there is no allegation of any unaccounted transactions in the show cause notice. Though the appellant did not fil
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6,62,005/-. They had also to pay medical expenses and compensations to personnel deployed for manpower supply. The appellant had produced all these documents which were not considered by the adjudicating authority. Further, the TDS deducted was pending refund and the appellant received the refund of ₹ 33,29,237/- on after a period of three years. All these resulted in financial hardships for which the appellant could not discharge the service tax within time. He prayed that since there were only belated payments, the penalties imposed may be set aside. 3. The ld. AR Shri S. Govindarajan appeared and argued for the department. He submitted that the appellant had collected the service tax and had not discharged to the Government. This is purely suppression of facts with intention to evade payment of service tax and therefore the penalties imposed are legal and proper. 4. Heard both sides. 5. The appellant is contesting the penalties imposed only. In Appeal No. ST/300/2012, the adju
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