No penalty where service tax along with interest and late fee deposited before issue of SCN

0 comments Saturday, February 11, 2012
Mumbai CESTAT has held in the following case that where assessee had paid service tax along with interest and penalty for late filing of return before issue of SCN, no penalty could be imposed on it.

Facts: In this case The assessee was engaged in providing maintenance or repair services. During relevant period though the assessee had collected service tax from service recipients but deposited same with the revenue belatedly along with interest. Besides that it also paid fees for late filing of return. Subsequent thereto, the Assistant Commissioner issued show-cause notice, and on adjudication of same, imposed penalties under sections 76, 77 and 78. The Commissioner (Appeals) upheld said order.
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Time barred assessment is void ab-initio,no need to deposit 25% u/s 62(5) under PVAT Act, 2005

Punjab VAT Tribunal is a very important case namely Baba Ji Rice Mills, vs. State of Punjab (2012) 41 PHT 197 (PVT) has held that once the case is hit by point of limitation, payment of 25% of the additional demand not essentially to be adjudicated. 

It is notable here that as per section 62(5) of Punjab VAT Act, 2005 prior payment of 25% of additional demand is mandatory before any appeal is being heard.
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