2006 (4) TMI 37 - AT - Service Tax

Service Tax Repeated delay in filing return - Appellant never raised the contention that he was not registered as tour operator as well he was registered as rent-a-cab operator Penalty imposed @ Rs. 100/- per day cannot be considered to be harsh

Summary

Issues:
- Appeal against penalty under section 77 of the Finance Act, 1994 for late submission of ST 3 return.
- Interpretation of Section 70(2) notice requirement for penalty imposition.
- Appellant's classification as a "rent-a-cab" scheme operator.
- Justification for penalty imposition and absence of reasonable cause for reduction.

Analysis:
1. The appeal challenged the penalty imposed under section 77 of the Finance Act, 1994 for late submission of ST 3 return. The Tribunal had previously remanded the matter for fresh decision. The penalty was initially set aside due to the absence of a notice under Section 70(2). However, upon review, it was found that the appellants had repeatedly delayed filing returns without a valid explanation, leading to the penalty imposition.

2. The appellant contended that they were a small-scale operator under the "rent-a-cab" scheme, not requiring a large fleet as per the scheme's provisions. The appellant's representative argued that the revenue should have inquired about the services provided. Reference was made to a Tribunal decision highlighting the necessity of issuing a notice under Section 70(2) before imposing penalties, which was not followed in this case.

3. The department's representative supported the penalty imposition, emphasizing that the appellant's classification as a rent-a-cab scheme operator was not raised earlier in the proceedings. The order-in-original confirmed the appellant's registration as a tour operator under Section 65(44) and established the failure to file required returns, justifying the penalty under Section 77.

4. The Tribunal dismissed the appeal, noting that the appellant's misconceived contentions regarding their classification and lack of notice under Section 70(2) were unfounded. The failure to furnish returns as mandated by Section 70(1) was established, leading to the penalty under Section 77. The Commissioner (Appeals) correctly upheld the penalty, finding no reasonable cause for reduction, thus warranting no interference with the impugned order.

In conclusion, the judgment upheld the penalty imposition under section 77 of the Finance Act, 1994, emphasizing the appellant's repeated delays in filing returns and the absence of a valid explanation. The appellant's classification as a tour operator was confirmed, and the penalty was deemed justified without any reasonable cause for reduction.