Service tax penalties can be upheld even without malice, emphasizing compliance with statutory filing requirements.

SANJIV SRIVASTAVA:

This appeal is directed against Order-in-Appeal No. GZB/EXCUS/000/APPL/ MRT/01/2025-26 dated 04.04.2025 of the Principal Commissioner, CGST (Appeals), Meerut. By the impugned order following has been held:

8. In light of the cited facts and findings taken into consideration in their entirety, I find that the subject appeal does not hold factual and statutory grounds w.r.t. the demand of Rs 7,85,949/- (14,80,387 - 6,94,438). Relatedly, on the basis of foregoing facts and findings, I hereby modify the impugned order on merits as under;

(i) I Confirm the demand of Service Tax, amounting to Rs. 7,85,949/- for the period 2014-15 by invoking the first proviso to Section 73 (1) of the Finance Act , 1994 read with Section 174 of the CGST Act, 2017 and appropriate amount of Rs. 6,94,438/- already deposited by the appellant against the confirmed demand of Rs, 14,80,387/- vide OIO dated 24.04.2024 and not in relation to the demand of Rs. 7,85,949/- confirmed under this para.

(ii) I Confirm the demand of Interest on the above amount of Service Tax Rs. 7,85,949/- under Section 75 of the Finance Act , 1994 read with section 174 of the CGST Act, 2017.

(iii) I Impose a Penalty of Rs. 7,85,949/- upon the appellant under Section 78 of the Finance Act 1994 read with section 174 of the CGST Act, 2017 for suppression of various facts and contravention of various provisions of the , 1994

(iv) I impose the Penalty of Rs. 10,000/- under Section 77 (1)(c) and penalty/late fee of Rs. 20,000/- for each return for FY 2015-16 under Section 70 of the Finance Act 1994 read with section 174 of the CGST Act, 2017.

The instant appeal bearing no. 57-ST/APPL- MRT/GZB/2024-25 dated 03.07.2024 been filed by M/s A S Advertising & Marketing P. Ltd., B-224, Shalimar Garden, Ghaziabad, U.P.- 201005 is herby disposed off on the above terms.

2.1 during the FY 2015-16, Appellant was registered with the Service tax department vide Registration no. AALCA11476HSD001 for providing taxable service as defined under Section 65B(44) of the erstwhile Finance Act , 1994 (here- in-after being referred to as 'the Act').

2.2 On verification of the Third-Party data, it was observed that the appellant declared sale of services of Rs.1,02,09,566/- in their ITR for the financial year 2015-16, while for the same period, the appellant declared their value of services as nil in their ST-3 returns (In fact they had not filed ST-3 returns). Thus, there was a difference of Rs.1,02,09,566/- between the value declared in ITR viz-a-viz value shown in ST-3 returns and the service tax liability on the said difference came to Rs.14,80,387/-.

2.3 By letter dated 27.02.2021, appellant was asked to clarify the matter and provide the ITR, 26AS, Balance Sheet, Reconciliation Statement along with the supporting documents for the Financial Year 2015-16. No response was received.

2.4 A Show Cause Notice dated 19.04.2021 was issued to the appellant asking him to show cause as to why:

(i) Service Tax amounting to Rs 14,80,387/- (Incl. cesses) (Rupees Fourteen Lakh Eighty Thousand Three Hundred and Eighty Seven Only), so deliberately and willfully short paid by them during the period from Aril 2015 to March 2016 should not be demanded and recovered from them under proviso to Section 73 (1) of the Finance Act ,1994;

(ii) Interest on the above amount of Service Tax, should not be demanded and recovered from them under the provisions of Section 75 of the Finance Act , 1994;

(iii) Penalty should not be imposed upon them under the provisions of Section 78 of the Finance Act , 1994;

(iv) Penalty should not be imposed upon them under Section 77 (1) (c) of the Finance Act , 1994;

(v) Penalty should not be imposed upon them under Section 70 (1) of the Finance Act , 1994;

2.5 Show cause notice was adjudicated vide the order in original No. 162/AC/STax/CGST/D-IV/GZB/ASASV/2022-23 dated 21.12.2022 holding as follows:

ORDER

(i) I confirm the demand and recovery of Rs.14,80,387/- (Inci. Cesses) (Rupees Four