Service Tax - Issuance of SCNs for levy of penalty where service tax is paid suo-moto by the assessee - Board clarifies.
As per Section 73 (1A) of the Finance Act, 1994, if the taxpayer pays service tax liability along with interest and a penalty equal to 25% of service tax amount, within a period of one month from the date of issue of SCNs, the proceedings against him are concluded. Similarly, section 73 (3) provides conclusion of adjudication proceedings in other cases on payment of service tax and interest.
A question has been raised as to whether the conclusion of proceedings in such cases is limited to the action taken under section 73 of the Act or all proceedings under the Finance Act, 1994, including those under section 76,77 and 78, get concluded.
Board has clarified that
1. Law prescribes conclusion of proceedings against such person to whom SCN is issued under sub-section(1) of section 73. Therefore, it is not merely a conclusion under sub-section (1), but conclusion of all proceeding against such person. Similar is the position in respect of sub-section (3) of section 73.
2. Accordingly, conclusion of proceeding in terms of sub-section (1A) and (3) of section 73 implies conclusion of entire proceedings under the Finance Act, 1994.
It is wonderful that Board had come out with this kind of clarifications. Let us hope the trigger happy field will stop issuing Show cause Notices in these cases. But it is a mystery known only to the Board as to why such important clarifications are secretly communicated to the field instead of being circulated publicly?
F.No. Dated : October 3, 2007