Customs, Excise & Service Tax Appellate Tribunal: This appeal was preferred before P. Dinesha, J., against the interest liability and penalty under Section 78 of the Finance Act, 1994.
Appellant was a registered service provider, providing ‘Manpower Recruitment/Supply Agency Services’. It was found while verification of Third Party Data that appellant’s total income did not tally with that declared in its balance sheet thus a show cause notice (SCN) was issued demanding service tax, interest under Section 75 of the Finance Act, 1994, along with penalty under Section 78 of the Act.
After this, an order was passed confirming service tax demand, interest and penalty. Aggrieved by the demand an appeal was filed before the Commissioner of GST & CE who vide impugned order partly allowed and partly rejected the appellant’s claim. The assessee submitted that the Commissioner had deleted the tax liability on the reimbursements but the final tax liability was not decided after the exclusion of such reimbursement. Tribunal was of the view that authorities below had demanded an amount beyond the SCN without any explanation and according to the settled position of law such action was not sustainable thus the re-quantified interest liability over and above the interest demanded in the SCN was set aside.
Tribunal noted that appellant had proved its bonafides when it claimed that it had made payments right from investigation stage itself and thus, appellant had made out a case for exercising discretion under Section 80 of the Finance Act, 1994 and hence, Tribunal directed the deletion of penalty under Section 78 of the Finance Act, 1994. Therefore, the appeal was partly allowed and partly remanded. [Sasi Enterprises v. Commissioner (GST), Appeal No. ST/42721/2018, dated 28-02-2019]