2009 (5) TMI 100 - AT - Service Tax

Penalty - appellants have pleaded that the delay in filing return was on account of illness of the mother of the appellants proprietor had his native place and as he has gone to visit her, return could not be filed in time. He had also pleaded that the appellants were not financially sound to make the payment of service tax and as such delay had occurred. - Prima facie, I find that the explanation given by the appellant is not sufficient to invoke the provisions of Section 80, as rightly held by the authorities below. Late filing of return and late payment of tax, prima facie attracts penalty under Sections 76 & 77. As such I direct the applicant to deposit 50% of the penalty

Summary

Issues: Delay in filing appeal, dispensation of pre-deposit penalty amount

The judgment by the Appellate Tribunal CESTAT, Ahmedabad, involved a case where the appellant sought condonation of an 18-day delay in filing the appeal due to visiting his ailing mother in a remote village of Tamil Nadu. The delay was condoned, and the COD application was allowed. Moving on to the stay petition, the appellant, registered under construction services, requested dispensation of the pre-deposit penalty amount of Rs. 69,596 imposed under Section 76 of the Finance Act, 1994 for late filing of return and delay in payment of service tax. The return for April 2006 to September 2006 was filed 187 days late due to the proprietor's visit to his ailing mother. The authorities found the explanation insufficient to invoke Section 80, and directed the appellant to deposit 50% of the penalty within six weeks from the date of the order, with compliance to be reported by 31-7-09, when the appeal would be taken up for final disposal after confirming compliance.

In analyzing the delay in filing the appeal, the tribunal considered the reason provided by the appellant, which was visiting his ailing mother in a remote village of Tamil Nadu. The tribunal found the reason genuine and condoned the delay, allowing the COD application. However, when addressing the dispensation of the pre-deposit penalty amount, the tribunal examined the grounds for the penalty imposed under Sections 76 and 77 of the Finance Act, 1994. The appellant's explanation for the late filing of the return and delay in payment of service tax was deemed insufficient to invoke Section 80, as held by the authorities below. Consequently, the tribunal directed the appellant to deposit 50% of the penalty within six weeks and report compliance by a specified date for further proceedings.

Overall, the judgment highlighted the importance of timely compliance with tax regulations and the consequences of late filing of returns and payment of taxes under the relevant provisions of the Finance Act, 1994. The tribunal balanced the appellant's genuine reasons for delay with the need for adherence to statutory requirements, ultimately requiring partial pre-deposit of the penalty amount as a condition for further consideration of the appeal.