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Issues: Delay in payment of service tax, imposition of penalty under sections 76 and 77 of the Finance Act, 1994, enhancement of penalty by the Commissioner, discrepancy in calculating the delay, applicability of minimum penalty under section 76.
In this case, the appellants, who are clearing and forwarding agents, were found liable for service tax with consistent delays in payment. The Assistant Commissioner imposed a penalty of Rs. 5,000 under section 76 and Rs. 1,000 under section 77 of the Finance Act, 1994. The Commissioner later enhanced the penalty to Rs. 1,24,285 due to the appellants' failure to provide a justifiable reason for the delays. The appellants challenged this decision, arguing that the delay was incorrectly calculated by the original authority. The advocate pointed out a discrepancy in the calculation of delays, stating that the delays considered were higher than the actual days of delay in depositing the service tax. The Revenue's representative referred to a Tribunal decision establishing a minimum penalty of Rs. 100 per day under section 76, suggesting the imposition of the maximum penalty of Rs. 200 per day. Upon review, the Judicial Member found a discrepancy in calculating the number of days of delay in depositing the service tax. Consequently, the impugned order was set aside, and the matter was remanded to the original adjudicating authority for a recalculation of the penalty amount in accordance with section 76 of the Finance Act, 1994, and the Tribunal's decision regarding the minimum penalty. The appeal was allowed by way of remand, addressing the issue of incorrect calculation of the penalty amount and the applicability of the minimum penalty under section 76.
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