Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *   CBIC issues draft rules for Customs valuation *  Top Headlines: Threshold for Benami deals, green bond investors, and more *  Govt aims 1-hour clearance for goods at all ports *  Exporters Allowed To Use RoDTEP, RoSCTL Scrips To Pay Customs Duty, Transfer Them; Rules Amended *  Millions of labourers to be affected by brick producers’ strike over hike in GST, coal rates *  Inauguration of ‘kendriya GST parisar’ *  Transporter can seek Release of Conveyance alone, not Goods under GST Act: Madras HC *  GST: Quoting of DIN Mandatory for Responding to Notice, Govt Modifies Portal *  Firms can soon file claims for GST credits of ?400 cr *  CBIC issues modalities for filing transitional credit under GST. *  Mumbai: Man creates 36 fake GST firms, arrested for input tax credit fraud of Rs 23 cr *  Report to restructure Commerce Ministry under study; idea is to set up trade promotion body: Goyal *  Firms can soon file claims for GST credits of ?400 cr *  Gambling Alert! Govt May Levy Up To 28% GST; UP, Bengal Back Move *  EPFO backs raising retirement age to ease pressure on pension funds *  India Moving Up Power Scale, Set to Become Third Largest Economy By 2030 *  Airfares Get Expensive: What Changes for Flyers From Today? *  IRCTC Latest News: Passengers to Pay More For Cancelling Confirmed Rail Tickets Soon. *  IBC prevails over Customs Act, says Supreme Court. *  As GST enters sixth year, a time for evaluation and reassessment *  There’s GST on daily essentials as Centre needs money to buy MLAs: Arvind Kejriwal *  Now, GST on cancellation of confirmed train tickets, hotel bookings *  GST kitty for top States could rise 20% in FY23, says Crisil *  French customs officials seize another cargo vessel over Russia sanctions *  TradeLens builds on Asia momentum with Pakistan Customs deal *  Hike tax on tobacco, reduce affordability & increase revenue: Civil society organizations to GST council *  Bihar: ?10 crore tax evasion on tobacco products detected in raids *  Centre failed on GST, COVID; would it be anti-national? Rajan on Infosys row *  Service Tax not Chargeable on Income Tax TDS portion paid by recipient: CESTAT grants relief to TVS *  Foreign portfolio investors make net investment of Rs 7575cr in Sep so far
Subject News *  Run-up to Budget: Monetary threshold for GST offences may rise to Rs 25 cr *   GST (Tax) E-invoice Must For Businesses With Over Rs 5 Crore Annual Turnover *   Both Central GST and excise duty can be imposed on tobacco, rules Karnataka high court *   CBIC Issues Clarification On Extended Timelines For GST Compliance *   CBIC Issues Clarification On Extended Timelines For GST Compliance *  Budget 2023- 9.6 crore gas connections *  GST: Tamil Nadu Issues Instructions for Assessment and Adjudication Proceedings *  GST: CBIC Extends Last Date for filing of ITC *  GST collection in September surpasses Rs 1.4 lakh crore for straight seventh time *  Dollar smuggling case: Customs chargesheet names M Sivasankar as key conspirator. *  Hike in GST rates fuels inflation *  Assam: CBI arrests GST commissioner in Guwahati *  GST fraud worth ?824cr by 15 insurance Cos detected *  India proposes 15% customs duties on 22 items imported from UK *  Decriminalising certain offences under GST on cards *  Surge in GST collections more due to higher inflation: India Ratings *  MNRE Notifies BCD and Hike in GST Rates as ‘Change in Law’ Events But With a Condition | Mercom India *   Solar projects awarded before customs duty change allowed cost pass-through *  Rajasthan High Court Dismisses Writ Petitions Challenging Levy Of GST On Royalty *   GST revenue in September likely at Rs 1.45 lakh crore *  Govt working on decriminalising certain offences under GST, lower compounding charge *  Building an institution like GST Council takes time, trashing is easy: Sitharaman *  GST collections in Sept may touch ?1.5 lakh crore *  KTR asks Centre to withdraw GST on handlooms *  After Gameskraft, More Online Gaming Startups To Receive GST Tax Claims *  Madras HC: AAR Application Filed Under VAT Does Not Survive After GST Enactment *  Threshold for criminal offences under GST law may be raised *  Bengaluru: Gaming company faces biggest GST notice of Rs 21,000 crore *  CBIC clarifies Classification of Cranes for GST, Customs Duty *  Customs seize gold hidden in bicycle in Kerala airport  

Comments

Print   |    |  Comment

PJ/CASE LAW/2016-17/3101

Waiver of penalty when service tax along with interest is paid before issuance of SCN.

Case:-S.K. ELECTRO ENGINEERS VERSUS COMMISSIONER OF CENTRAL EXCISE, NAGPUR
 
Citation:- 2015 (39) S.T.R. 686 (Tri. - Mumbai)
 
Brief Facts:-The appeal arises from Order-in-Appeal No. NGP/EXCUS/ 000/APPL/716/13-14, dated 12-7-2013 passed by Commissioner of Central Excise & Service Tax (Appeals), Nagpur. Vide the impugned order, the learned lower appellate authority has confirmed the adjudication order dated 24-12-2012 passed by the Joint Commissioner of Central Excise, Customs & Service Tax, Nagpur, wherein Service Tax demand of Rs. 12,32,434/- along with interest have been confirmed against the appellant and the amounts paid by the appellant towards the tax and interest liability have been appropriated. In addition, penalties have been imposed on the appellant under Sections 76, 77 & 78 of the Finance Act, 1994. Aggrieved of the same, the appellant is before Tribunal.
 
Appellants Contention:-The learned CA representing the appellant submits that the records of the appellant were audited by the audit party during 2009 and as soon as the short payment of Service Tax on their part was pointed out to them, they discharged the Service Tax liability along with interest thereon during March to December, 2009. However, a show cause notice in this case has been issued only in 27-6-2011, almost more than 1½ years after the tax and interest liability had been discharged. Section 73(3) of the Finance Act, provides for closure of proceedings if the tax along with interest liability has been discharged prior to the issue of notice. Even though the appellant had taken this plea before the authority, the same was not considered and therefore, the provision of Section 73(3) should have been given effect to and there is no case of imposition of penalty. Accordingly, he pleads for setting aside the penalties.
 
Respondents Contention:-The learned Assistant Commissioner (AR) appearing for the Revenue reiterates the findings of the lower authorities.
 
Reasoning of Judgement:-It is not in dispute that in the present case, the appellant had discharged the Service Tax liability along with interest thereon much before the issue of show cause notice and therefore, the provisions of Section 73(3) should have been given effect to, and the matter should have been closed. As the show cause notice has been issued much after the payment of statutory liabilities, there was no reason to issue the notice except for imposition of penalties. In view of the specific provisions incorporated in Section 73(3) of the Finance Act, 1994, the imposition of penalties is clearly not warranted. Accordingly, tribunal set aside the same and allow the appeal. They make it clear that only penalties under Sections 76, 77 & 78 of the Finance Act, 1994 have been set aside. There is no provision for waiver of late fee required to be paid under Rule 7(c) of the Service Tax Rules, 1944 and the appellant is liable to discharge the same.
 
Decision:-Appeal partly allowed.
 
Comment:-The analogy of the case is that as the appellant had discharged the Service Tax liability along with interest thereon much before the issue of SCN, the provisions of Section 73(3) is applicable which provides for closure of proceedings if the tax along with interest liability has been discharged prior to the issue of notice .In view of the specific provisions incorporated in Section 73(3) of the Finance Act, 1994, the imposition of penalties is clearly not warranted and accordingly the penalty imposed under Sec 76, 77 and 78 of Finance Act, 1994 set aside. But, Since there is no provision for waiver of late fee required to be paid under Rule 7(c) of the Service Tax Rules, 1944 the assessee is liable to discharge the same.
Prepared By:- Neelam Jain
 

Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com