2008 (6) TMI 160 - AT - Service Tax

Penalty - full tax was not paid before the issue of Show Cause Notice appellant submits that in this case, penalty of Rs. 3,55,832/- being equal to the tax amount is not justified - stay is partly granted

Summary

Issues: Pre-deposit of penalty and failure to file returns within time.

Pre-deposit of penalty:
The appellant was required to pre-deposit a penalty of Rs. 3,55,832/- along with Rs. 500/- for failure to file returns within time. The appellant had already deposited Rs. 3,46,456/- before the Show Cause Notice was issued and the remaining amount after adjudication. The appellant contended that he had valid grounds to contest the penalty, citing previous cases where the tribunal held that if the amount is deposited before the Show Cause Notice, penalty may not be levied. The tribunal mentioned that in cases where the full tax amount was not paid before the notice, partial penalties were imposed. Consequently, the tribunal directed the appellant to pre-deposit Rs. 10,000/- within two months, waiving the balance of penalties and staying recovery until the appeal's disposal. Compliance was to be reported by a specified date, after which the Revenue would be barred from recovering the amounts.

Failure to file returns within time:
The appellant was also penalized for failing to file returns within the stipulated time. The tribunal did not provide specific details on this issue in the summary provided. However, it is evident that the penalty for this failure was included in the total amount to be pre-deposited by the appellant. The tribunal's decision to waive the balance of penalties upon the pre-deposit of Rs. 10,000/- encompassed both the penalty for failure to file returns and the penalty related to the tax amount.

In conclusion, the judgment by the Appellate Tribunal CESTAT Bangalore dealt with the issue of pre-deposit of penalties, specifically focusing on the appellant's contention regarding the penalty imposed and the tribunal's decision to require a partial pre-deposit. The decision highlighted the importance of timely pre-deposit and the impact on penalty imposition, providing a clear directive for the appellant to comply with the specified pre-deposit amount to avoid further penalties and stay recovery until the appeal's resolution.