Coimbatore Earthmovers Hiring Division v. CC & CE & ST

FINANCE ACT, 1994

--Penalty under section 78--Service tax paid before issuance of show cause noticeImposition of ----Where service tax liability for the disputed period was paid by assessee along with interest before issuance of show cause notice, penalty under section 78 was not imposable.--Penalty under section 78 was imposed. Assessee contended that revenue raised demand relying upon invoices as well as the balance sheet filed by it. Thus, it had not suppressed any facts. Further, it contended that there was only delay in payment of service tax due to financial crisis, which was later, discharged by it. Held: When service tax liability for the disputed period was paid by assessee along with interest and ST-3 returns filed by it were accompanied by late fee, revenue ought not to have issued show cause notice since the ingredients of sub-section (4) of section 73 could not be alleged against assessee. Hence, penalty imposed under section 78 was set aside.