Shri P.K. Choudhary:— This is an appeal filed by the Revenue against the Order-in-Appeal No. 102/HWH/ST/2017-18 dated 31.08.2017 passed by the Commissioner (Appeals) of Central Excise & CGST, Kol. II.
2. Briefly stated the facts of the case are that the appellant is registered with the Department as service tax assessee. On scrutiny of the documents, it was observed that the Respondent-Assessee has taken service tax credit amounting to Rs. 13,01,708/- during the period 2009-2010 on the input services. During the period 2010-2011, it was observed that the appellants have availed both Cenvat Credit and abatement under Notification 01/2006-ST dated 01.03.2006 as amended. For the year 2010-2011 & 2011-2012, the allegation is that the appellants have made expenditure in foreign currency towards the professional and consultancy charges in respect of which they had discharged the service tax liability. Show-cause —cum-demand notice dated 19.09.2014 was issued. The adjudicating authority confirmed the demand of Rs. 13,01,708/- for the period 2009-2010 and imposed equal penalty under Section 78 of the Finance Act, 1994. For the period, 2010-2011, he confirmed the demand of Rs. 1,11,745/- and also imposed equal penalty under Section 78 of the Finance Act, 1994. For the period, 2011-20112he confirmed the demand of Rs. 2,56,779/- & Rs. 19,013/- and also imposed equal penalty under Section 78 of the Finance Act, 1994. He also confirmed the demand of Rs. 40,000/- as late fees upon the respondent-assessee in terms of Rule 7 (c) of Service Tax Rules, 1994 read with Section 70 of the Finance Act, 1994. A penalty of Rs. 40,000/- for delay in submission of ST-3 Returns was imposed for the period April, 2011 to September, 2011 and October, 2011 to March, 2012 under Section 70 of the Finance Act, 1994 and a penalty of Rs. 10,000/- has also been imposed under Section 77 for violation of provision of Section 70 of the Finance Act, 1994. Since the appellant had already deposited the entire amount of service tax along with interest, the same was appropriated. On appeal, the Commissioner (Appeals) set aside the imposition of penalty under Section 77(2) and Section 78 and regarding imposition of penalty of Rs. 40,000/- for late submission of ST-3 Returns in terms of Section 70(1), the Commissioner (Appeals) has observed as under:
“12. Regarding the imposition of penalty of Rs. 40,000/- for late submission of return in terms of Section 70(1) of the Act, I find that the appellant contended that they had deposited the late fees towards late submission of return for the period April, 2011 to September, 2011 and October, 2011 to March, 2012 vide Challan No. 00316 and 00320 both dated 22.04.2013. I find that the lower authority has failed to consider the said paid up amount towards late fees in r/o submission of ST-3 Return. I appropriated the said deposited amount to the Govt. exchequer. Further, it appears that the lower authority has also imposed penalty of Rs. 40,000/- upon the notice for delayed submission of return for the above mentioned two terms i.e. from April, 2011 to September, 2011 and October, 2011 to March, 2012 under Rule 7C of Service Tax Rules, 1994 for violation of Section 70 of the Act. On this ground, I find that in Rule 7C of Service Tax Rules, there is provision that “Where the assessee has paid the amount as prescribed under this Rule for delayed submission of return, the proceedings, if any, in respect of such delayed submission of return shall be deemed to be concluded”.
3. Revenue is in appeal for setting aside of the penalties.
4. Heard both sides and perused the appeal records.
5. I find that regarding service tax demand of Rs. 13,01,708/-, the appellants have reversed the amount. As regards, service tax demand for the period, 2010-2011 and 2011-2012, they have paid the entire demand of service tax along with interest and the same stands appropriated by the adjudicating authority. It is also observed that the demand of Rs. 40,000/- being late fees for the service tax return for the period April, 2011 to September, 2011 and October, 2011 to March, 2012, has also been paid and there is no occasion to impose and the separate penalty for the same and the Commissioner (Appeals) has rightly set aside the same. Since the appellant-assessee has paid the entire amount of service tax along with interest before issuance of show-cause notice, the Commissioner (Appeals) has rightly set aside the penalty by invoking the provisions of Section 80.
6. In view of the above discussions, I do not find any reason to interfere with the order of the Commissioner (Appeals) and accordingly, the appeal filed by the Revenue is dismissed. Cross Objection also gets disposed off.