2015 (3) TMI 917 - AT - Service Tax

Penalty u/s 77 - abnormal delay in filing service tax returns of 163 days - Non cooperation of appeallant - Held that - prima facie there is lack of cooperation on the part of the appellant. Simple issue has been dragging on for seven years. They are regular assessee in touch with the department and this issue could not be sorted out. I feel it is fit case for order of partial pre-deposit of penalty. Accordingly it is ordered that the appellant to deposit ₹ 2 lakh within six weeks - Decided against assessee.

Issues:
1. Imposition of penalty for abnormal delay in filing service tax returns.
2. Lack of cooperation from the appellant in providing necessary information.
3. Delay in resolving the matter between the department and the appellant.
4. Compliance with natural justice requirements.
5. Order for partial pre-deposit of penalty.

Analysis:
1. The judgment revolves around the imposition of a penalty on the appellants for abnormal delays in filing service tax returns over multiple years. The Commissioner of Central Excise (Appeals) upheld the penalty of Rs. 200 per day under section 77 of the Finance Act, 1994, totaling a delay of 2263 days. The appellant had filed an appeal against this order-in-appeal.

2. The delay in resolving the matter was attributed to the lack of cooperation from the appellant in providing necessary information. Despite requests from both the appellant and the department, the issue remained unresolved for several years. The appellant had been seeking details of the penalty calculation, but the department failed to provide the required information promptly.

3. The judgment highlights the non-cooperation from the appellant, which led to the delay in settling the penalty issue. The department eventually furnished the calculation, indicating a penalty of Rs. 4,52,600. The lack of proactive efforts from the appellant to engage with the department and exchange necessary information resulted in the escalation of the penalty amount over the years.

4. The legal counsel for the appellant argued that they had not received detailed calculations of the amount to be paid as service tax. However, the court found no merit in this argument, emphasizing that the matter had been ongoing since 2009, and the appellant had sufficient time to address the issue and cooperate with the department.

5. In response to the lack of cooperation and the prolonged delay, the court ordered a partial pre-deposit of Rs. 2 lakh by the appellant within six weeks. This order aimed to ensure compliance and expedite the resolution of the matter, given the abnormal delay of seven years. The department was directed to finalize the matter within six months after assessing the compliance and relevant documents.

This judgment underscores the importance of cooperation between taxpayers and tax authorities in resolving issues promptly and emphasizes the consequences of prolonged delays in compliance matters.

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