2009 (5) TMI 55 - AT - Service Tax

Penalties Failure to deposit service tax and interest - Courier Service - the tax returns were filed and the tax paid only after the default was pointed out by the department. No reason whatsoever has been slated by the appellant for the delay in filing returns and paying tax, nor even any relief under section 80 of the Act has been prayed for in this appeal imposition of penalty sustained.

Summary

Issues:
Penalties imposed on the assessee under sections 76 and 77 of the Finance Act, 1994.

Analysis:
1. The appellant, a courier agency, failed to file service tax returns and pay tax for the period from October 2004 to June 2005. The department issued a show-cause notice for penalties under various provisions of the Finance Act, 1994. The original authority imposed penalties under sections 76, 77, and 78. The Commissioner (Appeals) vacated the penalty under section 78, and the appellant challenged penalties under sections 76 and 77 in the present appeal.

2. The appellant argued that penalties should be set aside as they were paying service tax regularly, filed tax returns before the show-cause notice, and claimed no relief under section 80 of the Act. The appellant cited a Tribunal's decision in support. The ld. SDR contended that penalties should be sustained based on the facts of the case.

3. The appellate tribunal found no legally acceptable reason provided by the appellant to set aside the penalties. The appellant did not explain the delay in filing returns and paying tax, nor sought relief under section 80. The lower appellate authority had considered arguments for reducing penalties under section 76 but maintained penalties under sections 76 and 77. The Commissioner (Appeals) in the impugned order distinguished cited cases with clear reasoning.

4. After careful consideration, the tribunal upheld the penalties under sections 76 and 77. The appellant's failure to provide reasons for the delay in compliance and not seeking relief under section 80 led to the affirmation of penalties. The Commissioner's clear reasoning and distinction of cited cases provided no basis for the tribunal to interfere. The impugned order was sustained, and the appeal was dismissed.