Service Tax
TRT-2025-
Cestat-Ahmedabad
Date:-30-06-22
In:-
Issue Favourable to Tax Payer ?:- 0
Order Date: 30 June 2022
Facts:
- The appellant, M/s Khurana Engineering Limited is engaged in the providing taxable service namely, “Commercial and Industrial Construction Services” as defined under clause (25b) of Section 65 of the Financed Act, 1994.
- During the period April, 2005 to September, 2005 the appellant provided the aforesaid services valued Rs. 3,10,43,354/-, however, they have not discharged the service tax on due dates. Subsequently, they have paid Service Tax along with interest on 1 December, 2005.
- Thereafter, show cause notice was issued proposing penalty under Section 78. The adjudicating authority has confirmed the penalty of 200% of the Service tax amount. The appellant being aggrieved by the imposition of penalty filed appeal before the Commissioner (Appeals) who has upheld the penalty.
- Therefore, the present appeal filed by the appellant.
Issue:
- Whether the appellant is liable for penalty under Section 78 or otherwise?
Order:
- The Tribunal observed that this is not the case where the appellant have suppressed the transaction of services whereas, they have issued the legitimate invoices wherein they have shown the Service tax. This is only case of delayed payment of Service Tax which was subsequently paid on 01 December 2005 along with interest.
- From Section 73(3) it is clear that if the assessee on his own ascertainment or on pointed out by the department pay the required Service tax along with interest then department is not supposed to issue any show cause notice, consequently, no penalty can be imposed - In the present case, the appellant have admittedly paid the Service tax along with interest, thereafter, the show cause notice was issued. Since, the appellant had already paid the Service Tax along with interest without contesting the same their case clearly falls under Section 73 (3) of Finance Act, 1994.
- Therefore, the penalty imposed under Section 78 is set aside and the appeal is allowed.
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