2019 (2) TMI 958 - HC - Service Tax

Penalty u/s 78 of FA - submission of the counsel for the Appellant that there was no fraud or intention not to pay the service tax infact deposits have been made, but beyond the period of 30 days prescribed under Section 78 of the Finance Act, 1994 - Held that - The provision is unambiguous. A time frame has been fixed for deposit of the tax, the interest on delayed payment and penalty. The same is quite rigid. Tribunal has not committed any error by dismissing the appeal of the Appellant / the assessee - appeal dismissed.

Summary

Issues: Delay Condonation, Reduced Penalty under Section 78, Imposition of Penalty under Sections 76 and 78, Fraud or Intention Not to Pay Service Tax, Dismissal of Appeal

In the judgment, the court addressed an application for delay condonation of 54 days, which was granted based on the reasons provided in the application. The appeal before the court stemmed from an order passed by the Custom, Excise and Service Tax Appellate Tribunal, New Delhi, where the appellant's appeal was dismissed as the Tribunal declined to interfere with the order of the Commissioner (Appeals) regarding the reduced penalty under Section 78. The Tribunal cited specific reasons for its decision, emphasizing the clear provisions of Section 78 and the requirement for timely compliance with the deposit of adjudged tax and penalty. The court referred to relevant judgments from the Hon'ble Delhi High Court and highlighted the consequences of not meeting the specified time limit. Additionally, the court discussed the imposition of penalties under both Sections 76 and 78, clarifying the position prior to the amendment in Section 78. The court found no error in the Tribunal's decision, considering the rigid time frame set by the legislature and the absence of any discretion in the provisions.

Furthermore, the court addressed the appellant's argument regarding the absence of fraud or intention to evade service tax, noting that although deposits were made, they were made beyond the prescribed 30-day period under Section 78 of the Finance Act, 1994. The court emphasized the unambiguous nature of the provision, highlighting the fixed time frame for tax deposit, interest payment, and penalty imposition. Given the revenue-related issues and the lack of legislative flexibility, the court upheld the Tribunal's decision to dismiss the appeal, concluding that the appeal lacked merit and was therefore dismissed.