SCN should not be issued when service tax was paid along with Interest on pointing out since there is no case for penalty.

2015 – TIOL – 313 – CESTAT – MUM M/s. Lamour Advertising Agency vs. CCE

 

 

FACTS:

During the course of Audit of the Appellant, discrepancy was noticed between the turnover in the balance sheet and the ST-3 Returns. On being pointed out the entire amount along with interest was paid. Show Cause Notice was issued for imposition of penalty u/s. 73(3) of the Finance Act, 1994. The Commissioner Appeals confirmed the demand hence the appeal before the Tribunal.

 

HELD:

The Tribunal noted that the discrepancy is only because of the accounting system while the balance sheet was prepared on a mercantile basis, the payment of service tax was on receipt basis. Therefore, there was neither short payment nor any intention to avoid payment of duty. Further, Show Cause Notice should not have been issued when the service tax was paid within a week on being pointed out.