Order date: 14 October 2022.

Facts

• The Appellant, M/s. RPP Infra Projects Ltd., are engaged in providing various taxable services are holding service tax registration with the department.
• Revenue contended that the applicant has short-paid service tax of Rs.3,10,008/- for the period 2010 – 11 and 2011 – 12 on goods transport agency service. The appellant then paid the service tax along with interest on being pointed out by the department.
• The appellant contended that they was under the bonafide belief that the said amount of freight paid by the appellant is note taxable under the GTA service and hence penalty is not leviable. For this reason, the appellant had not paid the service tax. Further, even if the tax is paid, the appellant would be eligible to avail CENVAT credit.

Issue

• Whether the penalty imposed under sec. 77 and 78 of the Finance Act is legal and proper.

Order

• The authorities observed that the department has to refrain from issuing Show Cause Notice if the appellant pays up the service tax along with interest as ascertained by himself or by the officers.
• The authorities also noticed that the appellant has paid up the service tax along with interest on 4.5.2012 and 16.8.2012 and the Show Cause Notice was issued only on 22.10.2012. The appellant on being pointed out has paid the Service tax immediately. 
• Hence, the authorities held that the penalties imposed under sections 77 and 78 are not legal and proper and requires to be set aside. The impugned order is modified to the extent of setting aside the penalties imposed under sec. 77 and 78 of Act ibid.
• The appeal is allowed with consequential relief, if any