Case Law Details
YCH Logistics (India) Pvt. Ltd Vs C.C.E & C.S.T (CESTAT Bangalore)
The services imported by the assessee are taxable services and are chargeable to Service Tax but they had not paid the Service Tax applicable on the same. The assessee were liable to pay the Service Tax on import of such services as a recipient as provided under Section 66A of the Finance Act, 1994. On being pointed out by the Audit Party, the assessee accepted the contention of the audit and paid the Service Tax amount alongwith interest before issue of show cause notice.
Now the issue under consideration is that whether in such situation can department impose penalty under Section 77 & 78 on assessee?
As per the provisions of Section 73, 77 and 78 of the Finance Act, 1994, CESTAT find that Section 73(3) is very clear as it says that if a tax is paid along with interest before the issuance of show-cause notice, then in that case show-cause notice shall not be issued. In the present case, CESTAT find that the contention of the appellant that they bonafidely believed that they are not liable to pay service tax but when the audit party raised the objection that they are liable to pay service tax, then they immediately paid the service tax along with interest which is admitted in the impugned order, is justified. Further except mere allegation of suppression, the Department did not bring any material to prove that there was suppression and concealment of facts to evade payment of tax. Consequently, in our considered view, the imposition of penalty under Section 77 & 78 is not justified and bad in law. Hence, CESTAT set aside the penalty imposed on the appellant by allowing the appeal of the appellant.
FULL TEXT OF THE CESTAT JUDGEMENT
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
