1998 (6) TMI 1 - AT - Service Tax

Service Tax - Penalty for delayed filing of returns for four successive quarters leviable but reducible where assessee had not carry out any business

Summary

Issues:
1. Imposition of penalty for late filing of service tax returns.
2. Applicability of penalty provisions under Section 76 and Section 77.
3. Reduction of penalty due to non-conduct of business by the appellant.

Analysis:
1. The case involved the imposition of a penalty on the appellant, a share broker, for late filing of service tax returns for successive quarters. The appellant, registered under Section 69 of the Finance Act, 1994, had submitted returns showing "nil tax collected" as no business was conducted during the period. The Assistant Commissioner imposed a penalty of Rs. 20,000.00, which was challenged before CEGAT.

2. The appellant argued that the penalty under Section 76 could not be imposed as no tax was collected, and it was the responsibility of the department to remind the assessee to file returns. The appellant cited judgments where penalties on service tax assessees were set aside due to a lack of awareness regarding the new tax regime and non-collection of tax. The department contended that the penalty was already reduced by the Assistant Commissioner based on similar grounds.

3. The Tribunal considered the cited judgments and noted that relief was granted in cases immediately following the introduction of service tax. While the delay for the first quarter was attributed to postal delay, subsequent delays were not adequately explained. The Tribunal found that penalties under Section 76 may not apply when no tax is collected, but consistent failure to file returns justifies penalty under Section 77. Considering the appellant's non-conduct of business, the penalty was reduced from Rs. 20,000.00 to Rs. 5,000.00, and the appeal was dismissed, subject to the penalty reduction.

This detailed analysis covers the issues of penalty imposition, applicability of penalty provisions, and the reduction of penalty due to the appellant's non-conduct of business, providing a comprehensive overview of the judgment delivered by the Appellate Tribunal CEGAT, New Delhi.