1. The appellant M/s. Indian Security Guard Services is in appeal against Order-in-Appeal dated 24.09.2015, confirming the penalty imposed under Section 78 of the Act.
2. The brief facts of the case are that the appellant is a provider of 'Security Agency Services', registered with the Service Tax Department since December, 2006. They are registered under the head of 'Manpower Recruitment Agency & Security Services'. The ST-3 returns of the appellant had not been filed regularly. The return for the year 2006-07 was filed on 25th April, 2007 and the returns for the year 2007-08 to 2009-10 were filed on 16th May, 2011. There was an audit conducted by Revenue during June, 2011. Before the Audit, the appellant had disclosed their turnover, taxable turnover, admitted tax and tax paid for the period 2006-07 to 2009-10. On scrutiny of audit records, it was noticed that considering the admitted tax, the appellant had short paid service tax amounting to Rs. 25,47,434/-. The appellant deposited an amount of Rs. 11,75,872/-, and intimated to the Range Superintendent by their letter dated 18.11.2011, a copy of the same was also marked to the Superintendent (Audit) by letter dated 04.01.2012. It appeared to revenue that the appellant have not been discharging service tax regularly inspite of collection of service tax with intention to evade the payment of service tax. Further, though the appellant is required to file ST-3 returns through ACES and also to pay service tax, yet they have failed to do so and as such they are liable to penalty under Section 77 of the Finance Act, 1994 for violating the provisions of Rule 6 & 7 of the Service Tax Rules, 1994. Accordingly, show cause notice dated 18.04.2012 was issued proposing to demand Rs. 25,47,434/- as short paid, with proposal to appropriate Rs. 11,75,872/- already deposited, with further proposal to impose penalty under Section 78 & 77 of the Act. The said show cause notice was adjudicated vide Order-in-Original dated 15.05.2014 on contest, wherein the appellant had stated that they have disclosed their proper taxable receipts and admitted liability of service tax truly with the Department and as such the provisions of Section 78 is not attracted. Moreover, they were prevented from depositing the tax due to shortage of fund and there being no malafide intention. It is admitted case that there is no concealment of any taxable receipt. The short payment of service tax, is due to shortage of funds. So far penalty under Section 77 is concerned, it appeared that there is admitted default in filing the ST-3 return and accordingly, taking a reasonable view, penalty may be imposed. Further, the Additional Commissioner was pleased to confirm the proposed demand and also prepared matching amount, being amount deposited till the date of the adjudication along with interest and further equal penalty of Rs. 25,47,434/- was imposed under Section 78 of the Act. Further, penalty of Rs. 10,000/- was imposed under Section 77 (1) (d) of the Act for failure to pay service tax electronically for the year 2012-13. Being aggrieved, appellant preferred appeal before the Commissioner (Appeals), who have been pleased to uphold the Order-in-Original. Aggrieved by the said order, appellant preferred appeal before this Tribunal.
3. The learned Counsel states that there is no deliberate default in payment of taxes, admittedly, as the mother of the proprietor was seriously ill during the said period and was under hospitalized treatment involving high cost, as such the fund of appellant got diverted for the medical treatment. Further, it appeared that the appellant had paid the taxes in part from time to time. Further, the tax short paid amount, matches with the tax in arrears, as per the tax admitted in their return. Thus, there is no case of concealment or contumacious conduct on their part. As such the penalty under Section 78 is not attracted and accordingly prays for setting aside the same.
4. Heard the learned A.R. for revenue who has supported the impugned order.
5. Having considered the rival contentions, I find that the appellant had admittedly deposited Rs. 11,75,872/- before the issuance of show cause notice. Further, it is admitted facts that the tax short paid is part of the admitted tax not deposited as per the ST-3 returns, filed by the appellant, though belatedly. Further, I find that the appellant has taken care to deposit the tax in arrears before the passing of the adjudication order. The appellant further states that they have deposited the amount of interest payable for late payment of tax of Rs. 2,50,150/- on 28th June, 2014, Rs. 2,10,070/- on 28th June, 2014 & Rs. 4,55,100/- on 29th Jun, 2014, totaling Rs. 9,15,320/-. Under these facts and circumstances, I find that there is no matter of contumacious conduct, suppression of facts from revenue or false statement of account, is made out ag
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ainst the appellant. I further hold that in view of the declaration made in return filed before the issuance of show cause notice by the appellant, there is no suppression of facts or falsification statement of account (s) is made out. Accordingly, I set aside the penalty imposed under Section 77 & 78 of the Act. The adjudicating authority is directed to verify the interest, amount deposited for late deposit of tax and if any further amount is payable, he shall inform to the appellant who shall deposit the same after, verification, forthwith.