2007 (11) TMI 91 - AT - Service Tax

Enhancement of the penalty u/s 76 duty interest paid immediate on detection adj. authority invoking Sec. 80 imposed a penalty u/s 76 & u/s 77 - held that the imposition of penalty u/s 76 is discretionary & Sec 80 is for imposition or non-imposition or reduction Assessee appeal allowed

Summary

Issues:
Enhancement of penalty under Section 76 of the Finance Act, 1994.

Analysis:
The appeal was filed against Order-in-Revision No. 144/NSK/06, concerning the enhancement of penalty imposed on the appellant under Section 84 of the Finance Act, 1994. The appellant failed to pay Service Tax for the period October, 1998 to March, 2003 within the stipulated time. Subsequently, upon being pointed out, the appellant paid the duty of service tax along with interest. The adjudicating authority imposed a penalty of Rs. 2500 under Section 76 and Rs. 500 under Section 77. The Commissioner, after examining the case records and the adjudication order, concluded that the original order was not legal, proper, or correct. Consequently, a show cause notice was issued for the enhancement of the penalty under Section 76. The appellant did not represent before the Commissioner, who then enhanced the penalty. However, it was noted that the issue had been addressed by the Hon'ble High Court of Bombay in a previous case, where it was held that the imposition of penalty under Section 76 is discretionary, and provisions of Section 80 can be considered for imposition, non-imposition, or reduction in penalty. Therefore, the issue was found to be in favor of the appellant based on the precedent set by the High Court.

The judgment of the Hon'ble High Court of Bombay in Central Excise Appeal No. CEA 193/2006 was respectfully followed, leading to the allowance of the appeal with any consequential relief that may be applicable.