2003 (6) TMI 4 - AT - Service Tax

Service Tax (1) Late payment (2) Failure to perform statutory obligation (3) Imposition of penalty

Summary

Issues:
1. Imposition of penalties under Sections 76 and 77 of the Finance Act, 1994 for failure to furnish service tax returns within due dates.

Detailed Analysis:
- The appeals involved penalties imposed for delays in filing service tax returns under Sections 76 and 77 of the Finance Act, 1994. The Deputy Commissioner and the Commissioner reviewed the penalties, leading to enhancements in the penalty amounts in each case.
- The Commissioner argued that the minimum penalty under Section 76 is Rs. 100 per day, with a maximum of Rs. 200 per day, and that the absence of a comma after 'rupees one hundred' implies that the phrase 'per day' applies to both 'rupees one hundred' and 'rupees two hundred'. This interpretation was challenged by the appellants.
- The appellants contended that punctuation is a minor element in statutory interpretation and should not be the controlling factor. They cited previous judgments and argued that penalties should be imposed judiciously, considering the circumstances of each case and the presence of mens rea.
- The Tribunal analyzed the provisions of Sections 76 and 77 of the Finance Act, 1994. It noted that the absence of a comma does not automatically imply a per day penalty for 'rupees one hundred'. The Tribunal emphasized that penalties should not be imposed unless there is deliberate defiance of the law or dishonest conduct. The Tribunal found that the adjudicating authority had appropriately exercised discretion in imposing penalties based on individual case facts.
- The Tribunal concluded that the review authority's decision to enhance penalties solely based on the interpretation of Section 76 was not justified. It held that penalties should be imposed judiciously, considering the circumstances of each case, and allowed all the appeals accordingly.