2011 (2) TMI 80 - HC - Service Tax

Penalty reduced penalty 25% of the demand - the matter is covered against the revenue by order of in Commissioner of Central Excise Vs. M/s Pannu Property Dealers Ludhiana (2010 (7) TMI 255 - PUNJAB AND HARYANA HIGH COURT) Revenue appeal dismissed

Summary

Issues:
1. Interpretation of Section 80 of the Finance Act, 1994 in relation to the benefit extended by the Tribunal.
2. Imposition of penalties under Sections 76, 77, and 78 of the Finance Act, 1994.
3. Consideration of payment of service tax and penalties by the assessee.
4. Application of High Court decisions in similar cases.
5. Precedence of the Tribunal's decision in exercising powers under Section 80 of the Act.

Analysis:
1. The appeal was filed by the revenue under Section 35G of the Central Excise Act, 1944, challenging the order passed by the Customs, Excise & Service Tax Appellate Tribunal. The substantial question of law raised was whether the Tribunal was justified in granting the benefit of Section 80 of the Finance Act, 1994, despite alleged suppression of facts and delayed tax payment by the party.

2. A show cause notice was issued to the assessee for deficient payment of service tax, leading to penalties under Sections 76, 77, and 78 of the Finance Act, 1994. The Tribunal upheld the reduction of penalties, emphasizing that the tax liability was paid along with interest. The Tribunal referred to previous decisions and noted that no appeal was filed against their order. It also considered the invocation of Section 80 of the Finance Act, 1994, and the payment of 25% of the penalty by the respondent within the specified timeframe.

3. The learned counsel for the revenue acknowledged that a previous court order was unfavorable to the revenue in a similar case, leading to the conclusion that no substantial question of law arose in the present appeal. Consequently, the appeal was dismissed by the High Court of Punjab and Haryana.

4. The judgment relied on the interpretation of relevant sections of the Finance Act, 1994, and considered the payment of taxes and penalties by the assessee. It also highlighted the importance of previous court decisions and the application of similar precedents in determining the outcome of the appeal.

5. The Tribunal's decision to grant the benefit of Section 80 of the Act was upheld based on the circumstances of the case, including the payment made by the respondent and the absence of any appeal against the Tribunal's order. The dismissal of the appeal by the High Court affirmed the Tribunal's decision and the application of relevant legal principles in the matter.