2019 (1) TMI 1174 – CESTAT NEW DELHI – TMI – Penalty – Short payment of Service tax – foreign remittances made to the Foreign Service providers for receiving various services as that of advertising & marketing, business auxiliary service, commission to travel agent service etc. – entire alleged duty alongwith the interest has already been paid that too prior to the issuance of the SCN – applicability of Section 73 (3) of the Finance Act – scope of SCN – Held that:- The Department has made emphasis on sub-section (4) thereof, but the perusal of show cause notice makes it clear that Section 73 to sub-section (4) has not been invoked. It has now been settled law that the Department is not allowed to go beyond the show cause notice, otherwise also section 73 sub-section (4) includes the cases where the short payment or non-payment by the reason of fraud, collusion, willful misstatement or suppression of facts – Mere non-payment or short payment for a particular period even till the time a
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eign Service providers for receiving various services as that of advertising & marketing, business auxiliary service, commission to travel agent service etc. The Department thereafter served a show cause notice No.429 dated 10.04.2013 proposing the recovery of the said short paid tax alongwith the interest at appropriate rate and the penalty under Section 76 & 78 of the Finance Act, 1994. The proposal was confirmed vide the Order-in-Original No.16 dated 19.01.2017 when the appeal was preferred before Commissioner (Appeals). The Order-in-Appeal No.798 dated 25.07.2018 was passed rejecting the appeal. Being aggrieved, the appellant is before this Tribunal. 2. I have heard Ms. Priyanka Goyel, ld. Advocate for the appellant and Mr. P.R. Juneja, ld. D.R. for the Department. 3. Ld. Counsel has submitted that the entire alleged duty alongwith the interest has already been paid that too prior to the issuance of the show cause notice. It is further submitted that the said liability has
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short payment of the tax has not been paid by the appellant unless the Department has pointed it out, it amounts to the suppression of fact and in that scenario it is Section 73, sub section (4) which comes into existence falsifying the applicability of Section 73 of sub-section (3). Thus, there is no infirmity in the order. Appeal is prayed to be dismissed. 5. After hearing both the parties, I observe that narrow compass of the adjudication is that of penalty imposed and confirmed by Commissioner (Appeals) on the appellant. The only ground praying for setting aside the same is the applicability of Section 73 (3) of the Finance Act, which reads as follows:- Sub-Section (3) of Section 73 of the Finance Act, 1994 (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 o
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person under this sub-section and also on the amount of short payment of service tax or erroneously refunded service tax, if any, as may be determined by the [Central Excise Officer], but for this sub-section. Explanation 2. – For the removal of doubts, it is hereby declared that no penalty under any of the provisions of this Act or the rules made thereunder shall be imposed in respect of payment of service tax under this sub-section and interest thereon. (4) Nothing contained in sub-section (3) shall apply to a case where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of – (a) fraud; or (b) collusion; or (c) wilfulmis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax. 6. The bare perusal makes it clear that the word used in the provision is shall . Thus, the legislature has mandated that w
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tion (4) includes the cases where the short payment or non-payment by the reason of fraud, collusion, willful misstatement or suppression of facts. Mere non-payment or short payment for a particular period even till the time audit is not sufficient to prove the grave allegations as are contained in sub-section (4). It is rather the onus of Department to come forward to give some evidence of positive act on part of the appellant proving the appellants intend to evade the tax duty. The Hon ble High Court of Calcutta in the case of M/s. Simplex Infrastructure vs. CCE & ST reported in 2016 (42) STR 634 (Cal.) has already held that mere non-payment is not sufficient to prove as grave allegations as that of fraud, mis-representation and even that of suppression of facts. The findings of Commissioner (Appeals) in para 7.2 as impressed upon by the D.R. are therefore opined wrong. Sub-section (4) of Section 73 is held not applicable to the present case. Endorsing the view taken in M/s. I2K2
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