2001 (2) TMI 371 - AT - Central Excise

Summary

Issues:
Revenue's appeal against the order-in-appeal reducing penalty amounts under Section 77 of the Finance Act, 1994.

Analysis:
The appeal was filed by the Revenue challenging the order-in-appeal issued by the Commissioner (Appeals) which had reduced the penalty amounts imposed on the respondents for failing to furnish quarterly returns within the prescribed time under Section 77 of the Finance Act, 1994. The Deputy Commissioner had initially imposed penalties on the respondents for delays in filing returns for various periods. The Commissioner (Appeals) modified the penalties, reducing them significantly for some quarters while leaving one penalty amount unchanged. The Revenue appealed this decision before the Tribunal.

The Tribunal noted that the respondents had failed to appear for the hearing despite receiving notice. The main contention raised by the Revenue was that the order of the Commissioner (Appeals) did not comply with the provisions of Section 77 of the Finance Act, 1994. Section 77 stipulates penalties for failure to furnish returns on time. The Tribunal observed that the language of the section is clear and mandatory, specifying penalties for each day of delay. The Commissioner (Appeals) was criticized for reducing the penalties without providing any reasons, despite the delays in filing returns being established. The appellate authority was deemed to have no discretion in reducing the penalties, and the order was considered to be in violation of Section 77.

Consequently, the Tribunal set aside the order of the Commissioner (Appeals) and remanded the matter back to him for a fresh decision in compliance with the law. The appeal filed by the Revenue was allowed by way of remand, directing a reconsideration of the penalties in accordance with the provisions of Section 77 of the Finance Act, 1994.