2008 (12) TMI 336 - AT - Service Tax

Penalty- Commissioner (Appeals) had reduced penalty imposed under section 76 on assessee by original authorities. Revenue objected the same that section 76 is unambiguous and does not provide for any liberty to officers deciding case to reduce penalty. Held that- lower authority s decision to extend the benefit of section 80 is correct.

Summary

Issues:
1. Reduction of penalty under section 76 of the Finance Act, 1994 by the Commissioner (Appeals).
2. Interpretation of the scope of discretion in imposing penalties under section 76 of the Finance Act, 1994.
3. Comparison of decisions by different Tribunals and High Courts regarding the reduction of penalties under similar provisions.

Analysis:

1. The main issue in this case revolves around the reduction of penalties under section 76 of the Finance Act, 1994 by the Commissioner (Appeals). The Revenue filed appeals against the decision of the Commissioner, where the penalties were reduced significantly from the original amounts. The argument put forth by the Revenue was that section 76 does not provide any discretion to reduce penalties and that it should be a fixed amount per day. However, the Respondent's representative argued that authorities have the power to impose lesser penalties under section 80 of the Finance Act, 1994, citing a decision by the Hon'ble Bombay High Court in support of this contention.

2. The interpretation of the scope of discretion in imposing penalties under section 76 was a crucial point of contention. The Revenue contended that the penalties should be fixed at a specific rate per day without any room for reduction. On the other hand, the Respondent's representative argued that there are precedents where penalties have been reduced by exercising power under section 80 of the Finance Act, 1994. The Tribunal considered these arguments and referred to various decisions by different Tribunals and High Courts that supported the view that penalties under section 76 can be reduced by utilizing the power under section 80.

3. The Tribunal analyzed the various decisions cited by the Respondent's representative, which included cases from different Tribunals such as Mumbai, Chennai, Bangalore, and New Delhi. These decisions highlighted instances where penalties under similar provisions had been reduced, indicating a consistent trend in allowing such reductions. Ultimately, the Tribunal upheld the lower authority's decision to reduce the penalties under section 76, citing the precedents and the power granted under section 80 of the Finance Act, 1994 as the basis for their ruling. The appeals filed by the Revenue were rejected based on the findings that supported the reduction of penalties in line with the provisions of the law.