2008 (6) TMI 38 - AT - Service Tax

Commissioner enhanced penalty by invoking section 84 - It is undisputed that the appellant had deposited the entire amount of service tax leviable and interest thereon on 23.3.2004 - if the amount of service tax and the interest thereof is discharged before 31.10.2004, Amnesty Scheme introduced regarding the non-imposition of penalty would apply in the case order of commissioner is set aside but assessee is directed to pay penalty as imposed by adjudicating authority

Summary

Issues:
Enhancement of penalties under Sections 76 & 77 of the Finance Act, 1994.

Analysis:
The appeal was filed against an Order-in-Revision enhancing penalties under Section 84 of the Finance Act, 1994. The appellant had paid the service tax and interest on 23.3.2004, but penalties under Sections 76 & 77 were not discharged. The Commissioner of Central Excise & Customs, Nashik, reviewed the order and increased the penalties. The issue revolved around the enhancement of penalties, with reference made to a similar case involving Rakesh Rao. The Tribunal in the Rakesh Rao case held that penalties cannot be enhanced if the service tax and interest are paid before a certain date under an Amnesty Scheme introduced by the Central Government. The Tribunal also cited a case involving Bharat Security Service & Worker's Cont., stating that the Amnesty Scheme applies even to those who failed to comply with the law despite registration.

The Member (Judicial) found the issue in this case to be identical to the Rakesh Rao case. Consequently, the impugned order enhancing penalties was set aside, and the appellants were directed to deposit the penalties imposed under Sections 76 & 77 within two weeks from the date of the judgment.