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May 2012

Penalty — Education cess is for welfare of the state and appellant not entitled to credit of the same, hence no penalty leviable u/s.76 of Finance Act, 1994 (penalty for failure to pay service tax).

By Puloma Dalal
Jayesh Gogri
Chartered Accountants
Reading Time 1 mins
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(2012) 25 STR 594 (Tri.-Del.) — Pahwa International Pvt. Ltd. v. Commissioner of Service Tax, Delhi.

Penalty — Education cess is for welfare of the state and appellant not entitled to credit of the same, hence no penalty leviable u/s.76 of Finance Act, 1994 (penalty for failure to pay service tax).


Facts:
The appellant wrongly utilised credit for education cess against service tax. Education cess was meant for specific purpose i.e., welfare of the state.

Held:

The appellant was not entitled to avail credit of education cess against credit for service tax. The penalty u/s.76 of the Finance Act, 1994, upon the appellant was waived.

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