SHRI R. DEVENDIRAN Vs. CCE, (ST) COIMBATORE

JUDGEMENT

(1.) HEARD both sides. The Ld. Advocate appearing for the appellants states that the entire amount of service tax demand and interest due thereon have been paid by the appellants partly before the issue of show cause notice and partly within one month of the issue of show cause notice and before passing the adjudicating order. Since the lower authorities did not accept the contention of the appellants to calculate the tax amount treating the value realized by the appellants as inclusive of tax, the balance amount of Rs.42000/ - on that count also has been deposited by the appellants after filing the appeal before the Tribunal. She states that the appellants had not paid the tax amount earlier on account of their ignorance and not on account of any suppression, fraud etc. Even now, they are not disputing their tax liability. The appellants have not collected any tax amount from their customers, yet, they have promptly paid the tax amount soon after coming to know about their tax liability. Therefore, she prays for a lenient view in respect of penalty imposed under Section 78 of the Finance Act, 1994. Accordingly, she prays for the following: -

(2.) The Ld. SDR supports the impugned order and states that the cum -tax benefit can only be allowed to the appellants in case they are able to substantiate that they have not received any amounts towards tax over and above the value realized by them from their customers.

(3.) Considering all aspects of the case, and arguments from both sides, I find that the prayer made by the Ld. Advocate for the appellants is not unreasonable, particularly considering the promptness with which the appellants have discharged their tax liability and interest liability, after coming to know that they were liable to pay tax amount even though they have separately not collected the tax amount from their customers. In view of the fact that the appellants have made a payment of Rs. 3,42,788/ - before the issue of show cause notice, and there is no evidence of fraud, suppression etc., on their part, they can be given benefit under Section 73(3) of the Finance Act, 1994, to the extent the tax and interest has been paid by them prior to the issue of show cause notice, as the total amount paid by them towards tax and interest may be appropriated.