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Penalty — Difference between ST-3 return and Profit & Loss Account — Appellant on their own calculated differential Service tax, got it verified by Chartered Accountant and submitted the same to the Department — Section 80 of Finance Act, invoked — Appeal allowed.
Facts: ? The appellants were providing taxable Security Services. It was noticed that the value of service provided by the appellants shown in ST-3 returns was less than shown in the Profit & Loss Account and therefore, a letter was issued to them requesting them to produce a copy of balance sheet with Profit & Loss Account along with the bifurcated figures. The appellants submitted the copies as required and on verification of the same, it was observed that there was a difference in value as compared with ST-3 returns filed with the Department and therefore there was short payment of Service tax.
? The appellant submitted that the difference in value of services was on account of noninclusion of reimbursement received from their customers. This proved that the appellant had a reasonable belief that Service tax paid by them was correct. On noticing this, the appellant paid Service tax along with the interest. The appellant submitted the Profit & Loss Account within a week and thereafter made detailed calculation and paid the same, duly certified by Chartered Accountant. Thus the appellant was not interested in evading Service tax, but made a bona fide mistake. The very fact that even before the show-cause notice was issued, the appellant made the payment with interest showed that it was a fit case for waiver of penalty u/s. 80 of the Finance Act.
Held:
The fact that the appellant did not challenge the demand for Service tax and interest and wanted to end the litigation by paying tax with interest, the cause was held reasonable and the penalties were waived and the appeal was allowed.
