Stay abreast with the latest developments in the professional domain along with in-depth analysis through the monthly BCA Journal. Get access to an engaging library of researched publications from the BCAS stable.
Learn MoreExplore past issues of BCA Journal & indulge in a treasure trove of high-quality professional content across format of print, videos & learning events from the BCAS stable.
Learn More
Suppression cannot be alleged when there is a failure to pay
service tax under reverse charge mechanism as there is a scope of
interpretation in such cases.
Facts
The appellant received services
from foreign based commission agents and failed to pay service tax under
reverse charge mechanism. on this being pointed out by the audit team, service
tax liability was discharged and a show cause notice was issued demanding equal
penalty u/s. 78 of the finance act,
1994. The lower authorities confirmed the demand.
Held
The tribunal noted that in this case, the services were
received from outside india and the tax was payable under reverse charge
mechanism. It was not a case where the services were provided and the service
tax is payable thereon. Accordingly, the benefit of doubt goes in favor of the
appellant and therefore the charges of suppression cannot be alleged. Thus
provisions of section 73(3) of the finance
act are attracted and therefore, no show cause notice was required to be
issued and accordingly the penalty was set aside.
