2008 (2) TMI 274 - AT - Service Tax

Revenue s grievance is that the Commissioner (Appeal) does not have any power to reduce the penalty imposed u/s 76 - Commissioner (Appeals) while reducing the penalty has invoked the Provisions of Section 80 - It is seen from records that the Commissioner (Appeals) has held that reasonable cause is shown by the respondent herein for non-filing of the returns in time and for delay in paying service tax hence order of commissioner of reducing penalty is justified

Summary

Issues:
Condonation of delay in filing appeal, Reduction of penalty under Section 76 of the Finance Act, 1994, Interpretation of Sections 76 and 80, Judicial discipline in following High Court orders.

Condonation of Delay:
The appeal involved a delay of twenty days in filing, but the authorization lacked a date, making it unclear if the delay was only twenty days. Despite this, the delay was condoned, and the appeal was taken up for disposal due to the narrow issue involved.

Reduction of Penalty under Section 76:
The Revenue contested the reduction of penalty by the Commissioner (Appeals) under Section 76 of the Finance Act, 1994, arguing that the section mandates a minimum penalty of Rs.100 without provision for reduction. However, the Counsel cited precedents where penalties were reduced, and the Hon'ble High Court upheld such reductions, indicating discretion in not imposing penalties under Section 80.

Interpretation of Sections 76 and 80:
The Commissioner (Appeals) reduced the penalty under Section 76 by invoking Section 80, which allows for no penalty imposition if reasonable cause for failure is proven. Precedents showed that penalties were reduced based on reasonable causes, such as delays due to external factors like a company takeover, leading to late submissions and payments.

Judicial Discipline in Following High Court Orders:
The Tribunal emphasized the importance of judicial discipline in following High Court orders, especially when the High Court exercises discretion in not imposing penalties under relevant sections. The Tribunal found the issue in the case settled by the High Court's judgment in Civil Appeal No. 213/06, and rejected the Revenue's appeal based on the precedent and interpretation provided.

This judgment highlights the application of legal provisions, precedents, and judicial discipline in deciding on the reduction of penalties under the Finance Act, 1994. The Tribunal's decision was based on the interpretation of Sections 76 and 80, supported by previous rulings and the High Court's exercise of discretion in penalty imposition. The case underscores the significance of following established legal principles and court decisions in resolving similar issues.