By TIOL News Service

BANGALORE, JUNE 13, 2018: ASSESSEE is providing service to M/s. South India Paper Mills Ltd. (SIPM) in respect of promotion, marketing and collection of payment from customers.

On being pointed out by audit, assessee obtained registration and paid entire tax liability on 22/12/2012 and interest liability on 02/01/2013.

Thereafter a SCN dt. 26/08/2014 was issued demanding the service tax along with interest and it was also proposed to impose penalty.

Demand confirmed/appropriated alongwith interest and penalty. Appeal filed inviting attention to section 73(3) of FA, 1994 and seeking waiver of penalty u/s 80 of FA, 1994.

As Commissioner(A) did not rule in their favour, assessee is before the CESTAT and submits that having discharged service tax along with interest they had informed the Assistant Commissioner vide letter dt. 02/01/2013 about the payments with a request not to issue SCN by citing s.73(3) of FA, 1994 but to not avail. Nonetheless, they rely on the following decisions in support of their stand –

Adecco Flexione Workforce Solutions Ltd. 2011-TIOL-635-HC-KAR-ST

Shriram Epic Ltd. - 2014-TIOL-966-CESTAT-MAD

Calderys India Refractories Ltd. - 2013-TIOL-2134-CESTAT-MUM

Tejas Agency - 2014-TIOL-1332-HC-AHM-ST

The AR submitted that the appellant had suppressed the facts and hence are covered u/s 73(4) of the FA, 1994 and not s.73(3).

The CESTAT considered the submissions and observed that the case of the assessee is covered u/s 73(3) of the FA, 1994; that the decisions cited by the appellant are squarely applicable to the case on hand and, therefore, following the same the impugned order is not sustainable.

The appeal was allowed inasmuch as the penalty was set aside.

(See 2018-TIOL-1819-CESTAT-BANG)