Order Date: 22 February 2023

Parties: M/s. Nebula Computers Pvt. Ltd. vs. Commissioner of GST & Central Excise

Facts – 

• The Appellant’s, M/s. Nebula Computers Pvt. Ltd books were audited and it was noticed that the appellant had rendered the services and realized an amount of Rs.4,90,79,293/- for the period from April 2009 to January 2010 but did not pay the service tax of Rs.50,55,167/- collected from their customers.
• It was also noticed that the appellant did not file ST-3 Returns for the half-year ending 30.9.2009. They had also paid service tax belatedly for the year 2008 – 2009 with interest but there was a short-payment of Rs.12,059/-. Hence Show Cause Notice was issued to the appellant. The confirmation of demand and interest along with the imposition of penalty is justified.
• The appellant with regard to intention to evade payment of tax liability, submitted that they have filed statutory ST-3 Returns and had paid the entire service tax and interest and had intimated the fact through ST-3 Returns before the issue of show cause notice.

Issue – 

• Whether the appellant is liable to pay the penalty or not?

Orders – 

• The Tribunal observed that the appellant is pleading financial hardship for not paying the tax when due and are pleading for the benefit of not being penalised, for having subsequently paid the tax along with interest before the issue of show cause notice. But no substantive reasons have been demonstrated by the appellant to show that they were facing financial hardship.
• In the case of wilful suppression/fraud/collusion if the taxpayer pays service tax liability along with interest or if the taxpayer pays service tax liability along with interest and a penalty equal to 25% of service tax amount within a period of one month from the date of issue of show cause notice, then the adjudication proceedings can be concluded. But the appellant has not paid the reduced penalty as is required by law along with tax and interest.
• Hence, the appeal is hence devoid of merit and is rejected. The impugned order is upheld.