2007 (8) TMI 73 - AT - Service Tax

Penalty (Service tax) Department contended that appellant is liable for penalty u/s 76 Rs. 100 per day in case of failure to pay tax for every day after due date Delay in payment of service tax ranges from 3 to 58 months Enhanced Penalty imposed by the Commissioner in revision order upheld

Summary

Issues: Penalty imposition under Sec. 76 of the Finance Act, 1994 for delay in Service Tax payment.

In this case, the Asstt. Commissioner imposed a penalty of Rs. 2500/- on the assessees for a delay in paying Service Tax under the Real Estate Agents category from October 1998 to June 2003. The department argued that the penalty was too low as per Sec. 76, which allows a penalty of Rs. 100/- per day for late payment. The Commissioner revised the penalty to Rs. 53,034/-, a decision upheld by the Tribunal. The Hon'ble Bombay High Court set aside the Tribunal's order and remanded the case for a fresh decision.

The Tribunal noted that the appellants failed to pay Service Tax and file ST 3 returns on time, with delays ranging from 3 to 58 months. Referring to the ETA Engineering Ltd. v. CCE decision, the Tribunal clarified that a penalty of Rs. 100/- per day could be imposed for late payment. Considering the penalty did not exceed the prescribed limit, the Tribunal upheld the revised penalty and rejected the appeal.