2010 (12) TMI 119 - AT - Service Tax

Interest - The interest levied is only for the confusion of law for which that should be waived - Based on the decision of the Tribunal in the case of Greenply Industries Ltd. vs. CCE, Jaipur, reported in (2010 -TMI - 78698 - CESTAT NEW DELHI) - The time lost to collect revenue is compensated by collection of interest - Therefore, prayer of the learned Counsel for waiver of interest is not entertainable - In this case there is token penalty of Rs. 500/- which has been levied under Section 77 of the Finance Act, 1994 - Consequence of penalty follows to deter recurrence of breach of law - Appeal is dismissed.

Summary

Issues: Appeal for waiver of penalty and interest

Waiver of Penalty:
The appellant's counsel argued for the waiver of penalty, emphasizing that there was no dispute on tax liability and the interest was levied due to confusion of law. She relied on a Tribunal decision in a specific case. However, the Departmental Representative contended that interest follows any demand of service tax and penalties should be imposed for default. The Tribunal noted that the case cited by the appellant involved a specific direction by the Apex Court for compliance in a different litigation, which did not apply to the present case. The Tribunal held that the time lost to collect revenue is compensated by interest, thus denying the waiver of interest. Regarding the token penalty imposed under Section 77 of the Finance Act, 1994, the Tribunal found no apparent reason in the impugned order to support the appellant's request for waiver. The Tribunal emphasized that penalties serve to deter the recurrence of law breaches, leading to the dismissal of the appeal.

Conclusion:
The Tribunal dismissed the appeal for waiver of penalty and interest, stating that interest is justified to compensate for the time lost in revenue collection, and penalties are necessary to prevent future breaches of the law. The decision highlighted the importance of upholding tax compliance and deterrence through penalties, ultimately denying the appellant's request for relief.