Case Law Details
Servocraft HR Solutions Private Limited Vs Commissioner of Central Excise and Service Tax (CESTAT Chennai)
CESTAT Chennai held that Show Cause Notice ought not to be issued when the assessee has paid Service Tax along with interest on being pointed out. Accordingly, penalty imposed under section 77 and section 78 of the Finance Act, 1994 unwarranted.
Facts- The appellants are registered with the Service Tax Department under ‘Manpower Recruitment or Supply Agency Service’.
During the course of audit of accounts of the appellant, it was noticed by the Department that though the appellant had raised bills on their customers indicating service charges and Service Tax separately, they were not paying Service Tax within the due date prescribed as per Rule 6 of the Service Tax Rules, 1994 and was habitually delaying payment of Service Tax on various occasions. It was also noticed that they had not paid the Service Tax collected from the customers for the period from August 2010 to October 2010 till the visit of the audit officers on 11.2010. On being pointed out, the appellant paid the amount of Service Tax along with interest. It was also noted that the appellant filed ST-3 returns for the half year ending September 2010 and March 2011 on 21.02.2011 and 20.07.2011 and there was late filing of returns for other periods.
Show Cause Notice No. 359/2011 dated 26.09.2011 was issued, proposing to demand the amount of Rs.50,11,790/- for the period from August 2010 to October 2010 along with interest and for imposing penalties. After due process of law, the Original Authority, vide order impugned herein, confirmed the above demand along with interest and appropriated the amount with interest already paid by the appellant. A penalty of Rs.5,000/- was imposed u/s. 77 of the Finance Act, 1994 for the delay in filing periodical ST-3 returns. Further, a penalty equal to the amount of Service Tax confirmed was imposed u/s. 78 of the Act. The appellant was given an option to pay reduced penalty up to 25% of the Service Tax demanded if the Service Tax and interest was paid by the appellant within 30 days from the date of receipt of the order. Aggrieved by such order, the appellant is now before the Tribunal.
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