1998 (6) TMI 328 - AT - Central Excise

Summary

Issues:
1. Imposition of penalty for late filing of service tax returns.
2. Applicability of penalty provisions under Section 76 and Section 77.
3. Reduction of penalty amount due to non-conduct of business by the appellant.

Analysis:

Issue 1: Imposition of Penalty for Late Filing of Service Tax Returns
The case involved the appellant, a share broker, who was required to register under Section 69 of the Finance Act, 1994 for collecting service tax. The appellant got registered under Section 69 on 5-1-1995 and submitted quarterly returns showing "nil tax collected." The Assistant Commissioner imposed a penalty of Rs. 20,000 for late filing of returns, which was challenged before CEGAT. The appellant argued that the delay was due to the post office and lack of awareness about the procedure. However, the Commissioner upheld the penalty.

Issue 2: Applicability of Penalty Provisions under Section 76 and Section 77
The appellant's advocate argued that penalty under Section 76 could not be imposed as no tax was collected. The Department claimed that penalties were imposed considering the newness of the tax regime. The Tribunal noted previous judgments where penalties were set aside due to a general lack of awareness. However, in the present case, the appellant failed to file returns for four successive quarters, leading to the imposition of penalties under Section 76 and Section 77.

Issue 3: Reduction of Penalty Amount Due to Non-Conduct of Business
The Tribunal considered the appellant's non-conduct of business as a reason for reducing the penalty amount from Rs. 20,000 to Rs. 5,000. While Section 77 allowed for penalties due to consistent failure to file returns on time, the Tribunal acknowledged the appellant's situation of not conducting any business. Therefore, the penalty amount was reduced, and the appeal was dismissed except for the penalty reduction.

In conclusion, the judgment highlighted the importance of timely filing of service tax returns, the applicability of penalty provisions under Section 76 and Section 77, and the consideration of individual circumstances such as non-conduct of business in determining penalty amounts.