Case Law Details
Nebula Computers Pvt. Ltd. Vs Commissioner of GST & Central Excise (CESTAT Chennai)
CESTAT Chennai held that benefit of CBEC Circular F. No. 137/167/2006-CX dated 3.10.2007 vis-à-vis provisions of section 73(1A) of the Finance Act, 1994, relating to conclusion of entire proceedings on payment of service tax along with interest not available, as assessee failed to pay reduced penalty as required.
Facts- It was noticed that the assessee had rendered the services of manpower recruitment agency 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 and after due process, the amount was confirmed in the impugned Order in Original.
The appellant is not contesting the amounts demanded in the impugned order. They are, however, aggrieved that in spite of CBEC Circular F. No. 137/167/2006-CX dated 3.10.2007 wherein the Board had stated that once service tax along with interest is paid before the issue of Show Cause Notice, that the entire proceedings is deemed to have been concluded. Hence no Show Cause Notice could have been issued to them.
Conclusion- It is seen that the circular dated 03/10/2007 clearly states that section 73(1A) of the Finance Act, 1994 provides for conclusion of adjudication proceedings in the case of wilful suppression/fraud/collusion if the taxpayer pays service tax liability along with interest if the tax payer 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. In the instant case where suppression of facts has been alleged in the Show Cause Notice, the appellant has not paid the reduced penalty as is required by law along with tax and interest, however the same facility has still been extended to them by the original authority in the impugned order.
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