2005 (3) TMI 576 - AT - Central Excise

Summary

Issues:
1. Imposition of penalty for delayed payment of Service Tax.
2. Consideration of grounds of ailment and Section 80 provisions.
3. Payment of Service Tax based on billings rather than actual realization.

Analysis:
1. The appellant had filed a ROM application stating that Service Tax along with interest had been paid for delayed payment, challenging the penalty imposed. The appellant's consultant argued that no penalty should be imposed since the Service Tax was paid with interest without collecting it from clients, attributing the delay to the appellant's serious ailment. The consultant emphasized that Section 80 provides for no penalty if reasonable cause for delayed payment is proven. The Tribunal remanded the matter for fresh adjudication, considering the appellant's grounds and the provisions of Section 80.

2. The appellant's consultant contended that the appellant paid Service Tax based on billings, not actual realization, citing Rule 6(1) of the Service Tax Rules, which requires payment only on the amount received, not on receivables. This argument was put forth for reconsideration during the fresh adjudication ordered by the Tribunal. The Tribunal's decision to remand the matter indicates a need for a detailed review of the grounds raised by the appellant, including the impact of the appellant's ailment on the delayed payment and the application of Section 80 provisions to determine the penalty imposition validity.

3. The Tribunal's decision to allow the ROM application and remand the matter for de novo adjudication signifies a recognition of the appellant's contentions regarding the penalty imposition for delayed payment of Service Tax. The Tribunal's direction for a fresh speaking order indicates the importance of considering all relevant factors, such as the appellant's payment methodology based on billings and the applicability of Rule 6(1) of the Service Tax Rules, in the upcoming adjudication process. The remand order aims to ensure a thorough examination of the appellant's submissions and compliance with the legal provisions governing penalty imposition in such cases.