2019 (2) TMI 1104 – CESTAT CHENNAI – TMI – Penalty u/s 78 of FA – appellant had paid the entire service tax with interest prior to issuance of SCN – suppression of facts – Held that:- Revenue should have reasons before alleging fraud, suppression etc. and secondly the provisions of Section 78 stand controlled by Section 80 of the Finance Act, 1994, ibid. This makes that for every default, penalty under Section 78 is not automatic.
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In the case on hand, much before the issuance of show cause notice the assessee has paid the taxes along with applicable interest and there is no dispute on this. In the orders of the lower authorities, the Revenue has but for reiterating the wordings in the Section itself, has not gone beyond that to put o
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mitted that the first appellate authority has dismissed the appeal without going into the merits by holding that the appeal does not merit interference as regards the penalty imposed under Section 78 of the Finance Act, 1994, and thereby upheld the order of the original authority in toto. Ld. Advocate submits that the allegation of suppression of facts is incorrect and the appellant had paid the entire service tax with interest prior to issuance of the show cause notice. He pleads that there is no intention on the part of the appellant to evade payment of tax and hence the penalty imposed is unwarranted. Ld. Advocate relies on the following case laws in support of his contentions: 1. 2012 (26) STR 3 (Kar.) CCE & ST, LTU, Bangalore Vs. A
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her, non-payment or short payment of service tax as the case may be is for the reason of fraud or collusion etc. on whom a notice under Section 73 (1) is issued. Essentially, it implies that the Revenue should have reasons before alleging fraud, suppression etc. and secondly the provisions of Section 78 stand controlled by Section 80 of the Finance Act, 1994, ibid. This makes that for every default, penalty under Section 78 is not automatic. 4.2 In the case on hand, much before the issuance of show cause notice the assessee has paid the taxes along with applicable interest and there is no dispute on this. In the orders of the lower authorities, the Revenue has but for reiterating the wordings in the Section itself, has not gone beyond that
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