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TMI Blog2009 (11) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... ices classifiable under 'Cable Operator Service' during the period 16-8-2002 to 31-12-2003 without following the statutory formalities including payment of service tax. Adjudicating the show-cause notice dated 27-3-2006, the Assistant Commissioner of Central Excise, Gulbarga demanded service tax of Rs. 90,316 (Rupees Ninety thousand three hundred and sixteen only) including education cess as well as applicable amount of interest for the delay in payment of tax due. He also imposed a penalty of Rs. 90,316 (Rupees Ninety thousand three hundred and sixteen only) under section 76 of the Act. The respondents had discharged the service tax liability found in the order of original authority before the issue of show-cause notice. This fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Apex Court also observed that mens rea was not an essential ingredient for imposition of penalty. The penalty imposed under section 76 of the Act was mandatory like the penalty envisaged under section 11AC of the Central Excise Act. The penalty imposed by the original authority had to be restored. The appeal relied on several case laws and mainly the decisions in the case of Larson & Toubro v. CCE 2003 (161) ELT 827 (Trib. - Mum.) and CCE v. Toshi Auto Inds. (P.) Ltd. 2005 (183) ELT 48 (Trib. - Delhi) wherein imposition of penalty under section 11AC was upheld in cases of payment of duty not paid initially, but paid before the issue of show-cause notice. It is also submitted that in the case of CCE & C v. Padmashree V.V. Patil S.S.K. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondents submits that since the respondents had paid the tax due before the issue of show-cause notice in terms of section 73(3) of the Act, the department was precluded from initiating any penal action against the respondents. 7. I have also heard the learned JDR, who reiterates the grounds taken in the appeal. 8. I have considered the case records and the rival submissions. In the instant case, following a visit of the officers of the department, the respondents, a proprietary concern, registered with the Gulbarga Central Excise Division as a provider of service under the category 'Cable Operator Service' in the year 2002. They also paid service tax for the period ending 31-12-2003. However, they stopped paying service ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eed the amount of service tax that he failed to pay." 8.1 On reading of the above provision, it is obvious that penalty is imposable for the delay in payment of service tax towards the services rendered by an assessee. This penal liability is not linked to the timing of show-cause notice for demand of tax not paid. The case law relied upon by the Commissioner (Appeals) to vacate the penalty and by the Revenue in their prayer to restore the penalty do not appear to be relevant. In view of the statutory provisions reproduced above, the respondents were liable to penalty under section 76 of the Act. The lower appellate authority erred in vacating this penalty. In the circumstances, the appeal filed by the Revenue is allowed and the penalty im ..... X X X X Extracts X X X X X X X X Extracts X X X X
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