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TMI Blog2010 (1) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... ce was issued on 24.4.08 and original authority in addition to confirming the demand of service tax and interest already paid, imposed equal amounts as penalties under Section 76 and also equal amounts as penalties under Section 78 on each of the above units. In addition, he has also imposed a penalty of Rs.10,000/- on each of the units as late fee – Commissioner (appeals) dropped penalty imposed under Section 76 of the Finance Act, 1994 and taking note of the fact that the entire amount of service tax and interest was paid before issue of show cause notice reduced the penalties imposed under Section 78 to 25% of the penalties imposed on each of the units. Held that: Commissioner (Appeals) reduced the penalties under 78 to the extent of 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed amounting to Rs.50,328/-, Rs.13829/- and Rs.1,226/-, in respect of unit I, Unit II and Engineering Division respectively have been paid along with interest before issue of show cause notice. Show cause notice was issued on 24.4.08 and original authority in addition to confirming the demand of service tax and interest already paid, imposed equal amounts as penalties under Section 76 and also equal amounts as penalties under Section 78 on each of the above units. In addition, he has also imposed a penalty of Rs.10,000/- on each of the units as late fee. Commissioner (Appeals), on appeal, by the respondents dropped penalty imposed under Section 76 of the Finance Act, 1994 and taking note of the fact that the entire amount of service tax a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 76 and 78. Considering the nature of dispute, considering the quantum of the service tax involved and considering the fact that the respondents promptly paid service tax along with interest, Commissioner (Appeals) reduced the penalties under 78 to the extent of 25% of service tax involved and also set aside the penalties under Section 76 and the decision by him cannot be held unreasonable. Unlike in the case of Central Excise Act, the penalties imposable under Section 76, Section 78 of Finance Act, 1994 are not mandatory in as much as the same are to be moderated in terms of Section 80 of the Finance Act, wherever necessary. 6. In view of the above, I hold that there is no merit in the appeals by the Department. 7. Therefore, the appea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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