2018 (12) TMI 74 – CESTAT KOLKATA – TMI – Penalty u/s 77 and 78 of FA – invocation of Section 73(3) of the Finance Act, 1994 – appellant has paid service tax with interest on beiing pointed out – Held that:- Explanation of Section 73(3) is clarificatory in nature, hence can be made applicable both prospective and retrospective – The amendment vide Explanation to Section 73(3) is retrospective in nature as the said amendment has declared that no penalty shall be imposed in cases where the tax has been paid in full along with interest within before the issuance of the show cause notice.
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In the case of Tamil Nadu Small Inds. Corporation Limited v. Commissioner of Central Excise Chennai -[2008 (2) TMI 367 – MADRAS HIGH COURT], it was held that where an amendment has been introduced to clarify the intention of a notification, the said amendment shall be retrospective in nature.
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The appellant’s case deserves waiver of penalty imposed under Section 77 & 78 of the Finance Act, 19
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essee had accepted and deposited the service tax of ₹ 3,46,765/- under Section 73(3) of the Finance Act, 1994 along with interest of ₹ 3,05,044/-. Show Cause Notice dated 16.11.2015 was issued for imposition of penalty. Adjudicating Authority confirmed the demand of ₹ 3,46,765/- alongwith interest and appropriated the amount of ₹ 3,46,765/- paid by the appellant towards service tax duties and ₹ 3,05,044/- paid towards interest liability. He however imposed penalty of ₹ 3,46,765/- under Section 78 and ₹ 10,000/- under Section 77 of the Finance Act, 1994. On appeal the ld. Commissioner (Appeals) upheld the Order-in-Original and rejected the appeal filed by the appellant assessee. Hence, the present appeal before the Tribunal. 2. Ld. Advocate appearing on behalf of the appellant company reiterates the grounds of appeal and contended that the appellant had discharged service tax alongwith interest much before the issuance of the show cause notice b
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s clarificatory in nature, hence can be made applicable both prospective and retrospective. This issue is covered by the decision of the Hon ble Madras High Court in the case of Tamil Nadu Small Indus. Corpn. Ltd. v. CCE, Chennai [2009(234) ELT 413 (Mad.)]. I find that the provisions of Section 73(3) of the Finance Act, 1994 is applicable to the facts of the present case. The same is reproduced below: SECTION 73. Recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded.- (3) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person chargeable with the service tax, or the person to whom such tax refund has erroneously been made, may pay the amount of such service tax, chargeable or erroneously refunded, on the basis of his own ascertainment thereof, or on the basis of tax ascertained by a Central Excise Officer before service of notice on him under sub-section (1) in respect of suc
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trospective in nature as the said amendment has declared that no penalty shall be imposed in cases where the tax has been paid in full along with interest within before the issuance of the show cause notice. On this issue the Hon ble Karnataka High Court in the case of CCE & ST., LTU Bangalore v. Adecco Flexione Workforce Solutions Ltd. – 2012 (26) S.T.R. 3 (Kar.) held as under: 2. The assessee has paid both the service tax and interest for delayed payments before issue of show cause notice under the Act.Sub-sec.(3) of Section 73 of the Finance Act, 1994 categorically states, after the payment of service tax and interest is made and the said information is furnished to the authorities, then the authorities shall not serve any notice under sub-sec.(1) in respect of the amount so paid. 7. In view of the above discussions it is my considered view that the appellant s case deserves waiver of penalty imposed under Section 77 & 78 of the Finance Act, 1994 in view of Section 73(3) of
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