No penalty if all taxes are paid before issuance of SCN

Last updated: 23 August 2023

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The CESTAT, Chennai has ruled that penalties under Sections 77 and 78 of the Finance Act, 1994, should not be imposed if service tax and interest are paid voluntarily before a Show Cause Notice (SCN) is issued. The tribunal found that the appellant had paid the service tax and interest proactively. Citing previous rulings, the court emphasised that in cases of genuine confusion regarding service classification, and where tax is paid before the SCN, the matter should be considered settled as per Section 73(3) of the Finance Act, thus quashing the imposed penalties.

Court :
CESTAT, Chennai

Brief :
The CESTAT, Chennai in M/s. Susee Auto Sales & Service Pvt. Ltd. v. Commissioner of GST & Central Excise [Service Tax Appeal No.40764 of 2013 dated July 31, 2023] quashed the penalty imposed by the adjudicating authority and held that penalty under section 77 and 78 of the Finance Act, 1994 ("the Finance Act") will not to be imposed in cases where duty and interest are paid voluntarily.

Citation :
Service Tax Appeal No.40764 of 2013 dated July 31, 2023

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1 Year PLAN

1999

(Excl. of GST ₹359)

2 Years PLAN

3499

(Excl. of GST ₹629)

BEST VALUE

3 Years PLAN

4999

(Excl. of GST ₹899)

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Judgement posted by

Bimal Jain

Service

FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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