2007 (4) TMI 138 - AT - Service Tax

Penalty (Service tax) - Revenue contended that appellant liable for penalty on the ground that belated registration - After considering all the detail allowed waiver of penalty

Summary

Issues:
Appeal against waiver of penalty under Section 77 of the Finance Act, 1994 and violation of Section 70 of the Act.

Analysis:
The appeal was filed by the Revenue against the waiver of penalty by the ld. Commissioner (Appeal) under Section 77 of the Finance Act, 1994, and for the violation of Section 70 of the Act. The ld. JDR argued that the only reason cited by the appellate authority for waiving the penalty was that the Respondent sought registration immediately after the impugned period. The JDR contended that the order lacked rationality as it did not properly find if there was any violation in the past or future, except for the material period under consideration. It was emphasized that granting immunity without proper findings would encourage lawlessness. The JDR referenced previous decisions to support the argument that only reasonable causes should grant immunity from penalty, highlighting the need for good conduct by the assessee both in the past and future.

The Counsel for the Respondent argued that the penalty was imposed for seeking belated registration, and since registration was subsequently sought, the waiver of penalty by the ld. Commissioner (Appeal) was justified. The Counsel cited previous cases to support this argument. After hearing both sides and reviewing the Tribunal's orders referenced by them, it was noted that while the penalty amount was small, the justification for imposing a penalty should be appreciated. Mere deviation from compliance with the law should not automatically lead to a penalty. The decision to levy a penalty should consider the totality of facts and circumstances, including the nature and conduct of the respondent. In this case, the Appellate Authority considered the nature and conduct of the respondent and decided to exonerate them from the penalty. Given the small amount involved and the relevant considerations, the order of the Appellate Authority was upheld, and the Revenue's appeal was dismissed.