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

TlOL-313-CESTAT-MUM M/s. Lamour Advertising Agency vs. CCE [2015]

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

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