2008 (12) TMI 338 - AT - Service Tax

Penalty- Section 80 invoked- Whether the decision of Commissioner (Appeals) to reduced penalty u/s 76 is valid. In the light of the decision of CCE&C v. Vinay Bele & Associates 2008 -TMI - 3415 - HIGH COURT BOMBAY, held that penalty can be reduced in excise of the power under section 80 of the Finance Act.

Summary

Issues: Revenue appeal against reduction of penalty under section 76.

Analysis:
The appeal was filed by the revenue challenging the decision of the Commissioner (Appeals) where the penalty under section 76 was reduced from Rs. 93,180 to Rs. 10,000. The revenue contended that section 76 does not allow for discretion in reducing the penalty, citing the decision in ETA Engg. Ltd. v. CCE (2007) 8 STT 61 (New Delhi - CESTAT). Conversely, the respondent's Chartered Accountant argued that authorities have the discretion to impose a lesser penalty under section 80 of the Finance Act, 1994, referring to the decision in CCE&C v. Vinay Bele & Associates. Additionally, several Tribunal decisions were cited where penalties had been reduced, such as CCE v. Madhuri Travels, Sieger Spintech Equipments (P.) Ltd. v. CCE, CCE v. T. Stanes & Co. Ltd., Identity Advertising Associates v. CCE, CCE v. Punjab National Bank, and CCE&C v. D.R. Gade.

The Tribunal, in consideration of the various decisions presented by the respondent's Chartered Accountant, concluded that the issue at hand regarding the reduction of penalty under section 76 of the Finance Act, 1994, is covered by the power granted under section 80 of the Act. Accordingly, the Tribunal upheld the decision of the Commissioner (Appeals) to reduce the penalty and dismissed the revenue's appeal. It was also noted that the benefit of section 80 of the Finance Act, 1994, was correctly extended to the respondents.