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2005 (2) TMI 5 - AT - Service TaxService Tax Delayed payment of service tax; however there was no mala fide purpose in making belated payment Imposition of penalty
Issues: Contravention of provisions of Section 68 and 70 of Chapter V of the Finance Act, 1994 - Penalty under Section 76 for delay in payment of Service Tax - Penalty under Section 77 for late filing of ST-3 Returns.
In this case, the appellants were found to have contravened the provisions of Section 68 and 70 of Chapter V of the Finance Act, 1994 by failing to pay the Service Tax on the due date and not submitting half-yearly Returns in the prescribed form (ST-3) within the stipulated time frame. The Deputy Commissioner imposed a penalty of Rs. 7,105 under Section 76 for the delay in payment of Service Tax and Rs. 2,000 under Section 77 for the late filing of ST-3 Returns. The appellants had already paid Rs. 7,105 as penalty for late payment and Rs. 1,000 for late filing, which was reduced by the Commissioner of Appeals. The appellants accepted the penalty of Rs. 1,000 for late filing of Returns but contested the penalty of Rs. 7,105 for late payment of Service Tax. They argued that there was no mala fide intention behind the delayed payment and cited the provision in the Finance Act for waiving the penalty if a sufficient cause is shown. Since they had already paid the Service Tax and there was no mala fide intention, the Tribunal set aside the penalty of Rs. 7,105 for late payment while confirming the penalty of Rs. 1,000 for late filing of the Returns. The Tribunal considered the absence of mala fide intention in the delayed payment of Service Tax and the fact that the appellants had already paid the tax due. As per the provisions of the Finance Act allowing for waiver of penalty in case of sufficient cause, the penalty of Rs. 7,105 for late payment was waived, while the penalty of Rs. 1,000 for late filing of Returns was upheld. The appeal was disposed of accordingly, providing relief to the appellants on the penalty for late payment of Service Tax.
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