Case Law Details

Case Name : Pectjem Classes Vs. Commissioner of Central Excise
Appeal Number : [2014 (12) TMI 590 - CESTAT NEW DELHI]
Date of Judgement/Order :
Related Assessment Year :

Pectjem Classes (the Appellant) is a service provider under the category of Commercial Training and Coaching services. Their premises was visited by the officers on October 14, 2008 and from the records maintained by the Appellant, it was found that for the period May 2008 to September 2008, they have deposited less Service tax to the tune of Rs. 2,96,480/-.

Thus, proceedings were initiated against the Appellant for recovery of Service tax along with interest and imposition of penalties under various Sections of the Finance Act, 1994 (the Finance Act). Being aggrieved, the Appellant preferred an appeal before the Hon’ble CESTAT, Delhi contesting the amount of penalties.

The Appellant contended that the period involved is from May 2008 to September 2008 and the ST-3 for the said period was yet to be filed by October 25, 2008. Inasmuch as ST-3 return was yet to be filed, the Appellant would have reconciled the entire figures at the time of filing of return and would have deposited the Service tax accordingly. Hence, the Appellant prayed for setting aside the penalties.

The Hon’ble CESTAT, Delhi held that detection of short payment by the officers prior to filing of ST-3 is a premature detection. The Appellant has given a plausible explanation of short payment by submitting that inasmuch as entries were not made in the computers and the data was yet to be entered, there was no mala fide on their part not to pay Service tax. It was further held when that the entire case of the Revenue is based upon the scrutiny of the statutory records maintained by the Appellant, the Appellant was not in a position to evade any Service tax. Hence, the penalties imposed upon the Appellant were set aside while the demand of Service tax was confirmed along with interest.

(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: bimaljain@hotmail.com)

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0 responses to “Malafide cannot be attributed to the Assessee on detection of short payment by the Department prior to filing of ST-3”

  1. g.balakrishnan says:

    premature Notices by AOs in income taxes indeed are plenty especially in scrutiny cases, just because AOs enjoy presumption this is just could be that and this, if that is so the AO is not appearing to be an assessing officer and that way, i again wonder why AOs behave so in all revenue matters? Might be their higher ups force them or fear not achieving target

    All said and done it could be mostly out of ignorance of law of the AOs if not a mischief played by AO for any other obvious reasons, could one surmise!

  2. Zeya Alam says:

    Dear Sir
    It s informative.I would like to know what action should an Assessee take when the full due tax has been deducted by Deductor(Employer) but not total has been deposited and a demand has been raised to assessee for no fault on his part.
    Should he request Income tax assessing officer/CPC to raise the demand to Employer or Deductor giving his TAN NUMBER as Employer has issued Form 16A also for the amount deducted

  3. g.balakrishnan says:

    Right decision on CEST.

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