2008 (7) TMI 75 - AT - Service Tax

Consulting Engineering delay in payment of tax in revision order CCE imposed penalty u/s 76 following the decision of the Tribunal in the case of ETA Engineering Ltd. - Commissioner had not discussed the facts of the case before imposing penalty - It is well settled that the imposition of penalty is based on the facts and law of the case impugned order was passed without considering the submission of the Appellant - impugned order is set aside - matter is remanded to Commissioner

Summary

Issues:
Imposition of penalty under Section 76 of the Finance Act, 1944 based on the definition of "Consulting Engineering" and the Commissioner's failure to consider the Appellant's submissions before imposing the penalty.

Analysis:
The appeal was filed against the penalty imposed under Section 76 of the Finance Act, 1944. The Appellant, engaged in manufacturing engineering goods, argued that their activities did not fall under the definition of "Consulting Engineering." Despite depositing the tax to avoid legal issues, the Commissioner imposed a penalty of Rs.1,35,000. The Appellant cited Tribunal decisions to support their position. The Departmental Representative contended that the Appellant delayed tax payment, justifying the penalty. However, the Commissioner's order lacked a discussion on the case's facts and circumstances, which is crucial for penalty imposition. The Tribunal referred to a previous case law where penalties under Section 76 were specified. Since the Commissioner did not consider the Appellant's submissions, the order was deemed unsustainable. Consequently, the order was set aside, and the matter was remanded to the Commissioner for a fresh decision after considering the Appellant's submissions. The appeal was allowed for remand.