No penalty applicable if Service Tax was paid in cash immediately after the direction of Auditor

Last updated: 22 September 2021

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Quick Summary

In a recent ruling, the Central Excise Service Tax Appellate Tribunal (CESTAT) decided that Sud Chemie Pvt. Ltd. should not face penalties for service tax payments. The tribunal found no malicious intent, noting the company paid the tax promptly, even in cash, as soon as it was pointed out by the auditor. The ruling also addressed confusion around reverse charge mechanisms for services received from foreign entities, stating penalties were unjust for periods before specific legislation was in place.

Court :
CESTAT, Ahmedabad

Brief :
In Sud Chemie Pvt. Ltd. v. Commissioner of Central Excise, Vadodra [Service Tax Appeal No.10021 of 2019 dated September 02, 2021], Sud Chemie Pvt Ltd ("the Appellant") filed an appeal against the Order No. OIA-VAD-EXCUS-001-APP-287-2018-19 dated August 20, 2018 ("the Impugned order") which was passed by the Commissioner (Appeals) Central Excise, Customs and Service Tax, Vadodra ("the Respondent"). The Impugned order pertained to the demand of Service Tax and subsequent imposition of penalties on the Appellant by the Respondent.

Citation :
Service Tax Appeal No.10021 of 2019 dated September 02, 2021

Daily Limit Reached