SANJIV SRIVASTAVA:

This appeal has been filed by M/s. Head Post Master, Etawah HO, Etawah, - Appellant against the Order-in-appeal No. 425-ST/APPL/LKO/2022 dated 11.07.2022 of the Commissioner (Appeal) Customs, CGST & Central Excise Lucknow. By the impugned order following has been held:

“I find that the appellant claimed to have paid the said demand of service tax for the period from 01.10.2016 to 30.6.2017 through challan dated 12.03.2021. As the appellant has discharged their service tax liability for the said period on 12.03.2021, thus, late payment is evident from the records itself inviting liability of interest under Section 75 of the Act, which is mandatory in nature and recoverable from the appellant. As regards the imposition of penalty under the provisions of section 78 of the Finance Act, the same stands waived off in view of the missing elements of fraud, suppression etc. with intention to evade payment of tax. Further, taking a lenient view in the matter with regard to imposition of penalty of Rs. 14,000/- under Rule 7 of the Service Tax Rules, 1994 read with Section 70 & 77(2) of the Act, I vacate the same too, keeping in mind the fact that the appellant is a government department and intentional non compliance of the provisions of law is not forth coming from the records of the case.”

2.1 The appellant is engaged in providing various kind of Postal services including Courier Services etc.

2.2 An enquiry was initiated by the officers of DGGI, Kanpur. During scrutiny of the records of the appellant, it was noticed that service tax amounting to Rs.33,35,261/- had not been paid by the appellant on the services rendered by them during the period from April 2014 to June 2017. Further, it was also found that the said appellant had not filed the ST-3 returns for the period April 2014 to June 2017.

2.3 a show cause notice dated 30.10.2019 was issued to the appellant asking them to show cause as to why:

(i) Service Tax amounting to Rs.33,35,261/- (Rs. Thirty three lacs thirty five thousand two hundred sixty one only) not paid by them during the period from Ist April'14 to 30th June'17 should not be demanded and recovered from them by invoking extended period under proviso to Section 73 (1) of the Finance Act., 1994

(ii) Interest at appropriate rate should not be charged and recovered from them in respect of amount of Service Tax mentioned at S.No. (i) above under Section 75 of the Finance Act 1994; and

(iii) Penalty under Section 78 of the Finance Act, 1994 should not be imposed upon them in respect of Service Tax amount mentioned at S.No. (i) above;

(iv) Penalty under Section 77 (1) (b), 77 (1) (d), 77 (1) (e) and 77 (2) of the Finance Act, 1994 should not be imposed upon them for their various acts of omission and commission as discussed above;

2.4 The show cause notice was adjudicated as per Order-in Original No. 25/Demand/ST/AC-FZD/2021-22 Dated 27.05.2021 holding as follows:

ORDER

(i) I Confirm the demand of Rs.10,16,176/- (Rupees Ten Lacs sixteen thousand one hundred seventy six only) upon the party under Section 73 (1) of the Finance Act, 1994 read with Section 174 of the Central Goods & Services Tax Act, 2017. Since, the party have already deposited service tax of Rs.10,16,176/- as discussed above, the same is liable to be appropriated. I withdraw the Service Tax demand amounting to Rs.23,19,085/- (Rs. Twenty three lacs nineteen thousand eighty five only) as proposed to be confirmed upon them under proviso to Section 73 (1) of the Finance Act, 1994 read with Section 174 of the CGST Act, 2017 as discussed above, being not sustainable.

(ii) I order to recover the interest at the applicable rate from the party on the above confirmed amount of service tax under Section 75 of the Finance Act, 1994 read with Section 174 of the Central Goods & Services Tax Act, 2017.

(iii) I impose penalty of Rs. 10,16,176/- (Rupees Ten Lacs sixteen thousand one hundred seventy six only) equal to the Service Tax amount liable upon the p