Whether show cause notice is to be issued when an assessee does not pay service tax on time and but later on their own ascertainment pays the same along with interest and informs the Department in writing.

PJ/Case Laws/2012-13/1167

CASE:GUPTA COAL FIELD & WASHERIES LTD Vs COMMISSIONER OF SERVICE TAX, NAGPUR

CITATION:2012-TIOL-908-CESTAT-MUM
ISSUE:Whether show cause notice is to be issued when an assessee does not pay service tax on time and but later on their own ascertainment pays the same along with interest and informs the Department in writing.
BRIEF FACTS: The brief facts of the case are that appellant are registered with the service tax department and paying service tax and filing their service tax returns regularly. But the period October 2008 to March 2009 they did not file their service tax returns in time and had not paid the service tax in time. On their own ascertainment on 17.12.2009, the appellant filed their returns of service tax of October 2008 to March 2009 and paid the entire service tax along with interest. On 15.04.2010, a show-cause notice was issued to appropriate the amount of service tax paid along with interest and invoking the provisions of section 76 and 77 of the Finance Act, 19984. The show-cause notice was adjudicated and service tax along with interest was appropriated and penalty under Section 76 and 77 were also imposed on the appellant.

APPELLANT’S CONTENTION:The appellant submitted that as per provisions of Section 73(3) of the Finance Act, 1994, the show cause notice was not required to be issued. To support this contention, he relied on the Board circular no. 137/167/2006- CX-4 dated 03.10.2007. Therefore he prayed that the impugned order qua imposing penalty be set aside.
RESPONDENT’S CONTENTION:The respondent submitted that if this type of activity is allowed, nobody will pay service tax in time and they will get the shelter of Section 73(3) and no penalty will be imposed on the assessee.

REASONING OF JUDGEMENT:“Sec. 73(3)- Where any service tax has not been levied or paid or has been short levied or short paid or erroneously refunded, the service tax, or the person to whom such tax refund has erroneously been made, may pay the amount of such service tax, chargeable or erroneously refunded, in the basis of his own ascertainment thereof, or on the basis of tax ascertained by a Central ExciseOfficer before service of notice on him under sub section (1) in respect of such service tax, and inform the Central Excise Officer of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the amount so paid.”

It is found that it is a mandate of the Act that if any assessee does not pay service tax in time and does not file the return in time, but later on, on their own ascertainment thy pay service tax along with interest and file the return and inform the department in writing, in that case show cause notice is not required to be issued. Same has been clarified by the Board circular cited above. Admittedly, in the a case the appellant has paid service tax along with interest and filed the service tax returns on 17.12.2009. Therefore, after waiving the requirement of pre-deposit, the appeal itself for final disposal.

DECISION:Appeal and stay application disposed of.

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PJ/Case Laws/2012-13/1167

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