WORLD VIEW VISION Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) This appeal is by the assessee challenging the order passed by the Tribunal holding that the assessee is liable to pay penalty even though he has paid duty and interest prior to the issue of show-cause notice under sections 76 and 78 of the Finance Act, 1994.

(2.) The facts are not in dispute. The assessee is a cable operator. He got himself registered as a service provider under the Finance Act. Thereafter he was remitting the service tax payable for the amounts he received from his customers. In pursuance of an enquiry by the department, he gave information regarding the number of subscribers, the amount charged, amount collected and the period for which it is collected and also stated that he would pay the differential tax after quantification by the department as he has not maintained any accounts. It is thereafter a communication was sent as per Annexure 'D' pointing out that he is liable to pay Rs. 81,786 of service tax Rs. 1,318 on Education Cess and Rs. 8,647 Interest, in all a sum of Rs. 91,751. On receipt of the said communication he promptly paid the said amount on 23-11-2005. It is thereafter proceedings were initiated under section 73 of the Finance Act asking him to show-cause why penalty under sections 76 and 78 should not be imposed for suppression of facts and for wilful misstatement. He gave a reply contending that he had not maintained accounts and he had not received the subscription from the consumers. He paid service tax in respect of payment received and he had not paid service tax in respect of the amount he had not received. However, on computation he has paid the tax even before issue of show-cause notice. However, the assessing authority did not accept the aforesaid explanation and proceeded to levy penalty both under sections 76 and 78 of the Act. Aggrieved by the said order of levying penalty, the assessee preferred an appeal to the Commissioner of Central Excise Appeals, who accepting the cause shown by the assessee set aside the order of the assessing authority imposing penalty. In pursuance to the said order the penalty paid was also refunded. The revenue challenged the said order of the Appellate Commissioner before the Tribunal set aside the order of the Appellate Commissioner on the ground that once suppression of facts is established which do not constitute sufficient cause for non-payment of duty and interest the penalty is liable to be imposed under sections 76 and 78 of the Act even though the duty and interest is paid even before the issue of show-cause notice. Aggrieved by the said order the assessee is before us.

(3.) Learned counsel for the assessee submitted that when once the duty and interest is paid even before issue of show-cause notice by virtue of sub-section (3) of section 73 of the Act, authorities could not have initiated proceedings much less levied penalty and therefore, he submits, the order passed by the Tribunal requires to be set aside.