2019 (2) TMI 878 – CESTAT MUMBAI – TMI – Imposition of penalty – non-payment of service tax – tax with interest paid on being pointed out – Held that:- The Appellant although has not charged service tax from his clients but despite that paid the entire service tax amount prior to the receipt of the Show Cause Notice and also paid the entire interest before the issuance of the order-in-original, this is a fit case to invoke the provision of Section 80 ibid.
–
This is a case where the Appellant has been able to show reasonable cause for delayed payment under bonafide belief as to taxability to service – the penalties imposed on the Appellant cannot be sustained – appeal allowed – decided in favor of appellant. – APPEAL NO: ST/87915/2018 – A/85277/2019 – Dated:- 13-2-2019 – Shri Ajay Sharma, Member (Judicial) Appellant: Shri Saurabh P. Rairikar, Chartered Accountant Respondent: Shri Onil Shivdikar, Assistant Commissioner (AR) ORDER This appeal has been filed from the impugned order d
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
03/2017 was passed confirming the demand of interest and penalty under section 77 and 78 of the Finance Act, 1994. On appeal the learned Commissioner vide impugned order dated 07/11/2017 rejected the appeal filed by the Appellant. 3. Heard learned Chartered Accountant for the Appellant and Learned Authorised Representative for the Revenue and perused the records. 4. The Appellant herein is not disputing the Service Tax liability and interest and rather it is an admitted fact that he has paid the entire Service Tax demand before the service of Show Cause-cum-demand Notice on the Appellant and also paid the interest before the service of the order passed by the Adjudicating Authority. It is a specific case of the Appellant that he has not recovered Service Tax from his clients but despite that as soon as he comes to know about his service tax liability he pays the same from his own pocket. 5. According to him, initially he was not aware about the Service Tax liability and hence, neither
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ability and therefore the penalty under Section 77 and 78 ibid has been rightly imposed upon the Appellant. He also submitted that it has been laid down by the Hon ble Supreme Court in catena of decisions that mandatory penalties are imposable even if duty is paid prior to issuance of Show Cause Notice. 6. It is not disputed that the Appellant has paid the Service Tax before the service of Show Cause Notice and also paid the entire interest before the issuance of order-in-original passed by the Adjudicating Authority. Therefore, the Appellant on being informed about their liability to pay service tax have been readily accepted and discharged his liability in full and the same is not disputed. The law laid down by the Hon ble Supreme Court which has been referred to by the learned Commissioner in the impugned order clearly mentions that penalty under Section 78 of the Finance Act is mandatory subject to the caveat that non-payment of service tax was a conscious and/or deliberate act on
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
read as under: 80 (i) notwithstanding anything contained in the provisions of Section 76, Section 77 or Section 78, no penalty shall be imposable on the assesee for any failure referred to in the said provisions, if the assessee proves that there was reasonable cause for the said failure. In terms of the aforesaid section an assesee can plead for waiver of imposition of penalties levied under Sections 76, 77 & 78 of the Act if he is able to demonstrate a reasonable cause for non-payment of service tax. Reasonable Cause means an honest belief founded upon reasonable grounds. The reason cited by the Appellant for non-payment of service tax at the relevant time is ignorance of the provisions of service tax liability. He has also claimed that due to misunderstanding, he has neither collected any service tax from his clients nor paid the service tax to the Government. This fact clearly establishes the fact that the Appellant had no malafide intention not to pay service tax. It is also
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =