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May 2011

(2011) 21 STR 631 (Tri.-Ahmd.) — Jay Dwarkadish Engg. & Electricals Contractor v. CCex., Rajkot.

By Puloma Dalal, Jayesh Gogri Chartered Accountants
Reading Time 1 mins
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Delay in payment of service tax — Tax paid with interest subsequently — Department informed of payment through ST-3 return — Show-cause notice was issued for levy of penalty by the Department — Penalty cancelled.

Facts:
The appellants were engaged in construction service. During the period from April 2007 to September 2007, there was delay of 20 to 47 days in making the payment of service tax. Delayed payment was made with interest. Penalty was imposed on the appellant u/s. 76 of the Finance Act, 1994. Instead of appearing the appellants filed the written representation stating the payment of tax along with interest was made and reliance on the Tribunal decision, in U.B. Engineering Ltd. v. Commissioner, 2010 (20) STR 818 (Tribunal), to support their contention that where an assessee pays service tax with interest and informs the Central Excise Officer, the Central Excise Officer shall not issue a show-cause notice.

Held:
The Tribunal observed that appellants paid the service tax with interest and the Department was informed of the same through ST-3, the provisions of section 73(3) of the Finance Act is applicable and in such cases no show-cause notice need to be issued. Allowing the appeal, the penalty u/s. 76 was held unsustainable.

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