Customs, Excise and Gold Tribunal - Mumbai
Commr. Of Service Tax vs Gamma Consultancy Pvt. Ltd. on 17 August, 2006
Equivalent citations: [2007]14STT20
ORDER Chittaranjan Satapathy, Member (T)
1. The respondents are not present. Heard the learned DR for the applicant Commissioner. The department's appeal is against the waiver of the penalty amounts and reduction in penalty amount by the lower appellate authority under Sections 76, 77 & 78 of the Finance Act, 94.
2. 1 find that the lower appellate authority has given the following findings in support of his decision :
I find that there is a reasonable ground for the failure on their part for non-submission of service tax returns and delay in crediting the Service Tax. Under the provisions of Section 80 of the Act, they are entitled for wavier of the penalty. I also find that under Section 80 of the Act, which reads as under. "Penalty not to be imposed in certain cases. Notwithstanding anything contained in the provisions of Section 76, Section 77, Section 78 or Section 79, no penalty shall be imposable on the assessee for any failure referred to in the said provisions if the assessee proves that there was reasonable cause for the said failure." Thus, there is a provision for not imposing any penalty if the assessee proved that there was a reasonable cause for the said failure. I find that the appellants, in this case were under the bona fide doubt regarding their activity whether covered by Service tax or not, therefore there was a reasonable cause on their part in not depositing the Service tax in time. Therefore, I am of the view that notwithstanding anything contained in Section 76 and Section 77 of the Act, the appellants are entitled for the benefit of Section 80 of the Act and accordingly, I hold that no penalty under Section 76 and Section 78 of the Act should be imposed on the appellants, by applying ratio of Tribunal (Larger Bench) judgment in the case of ETA Engg. Ltd. v. CCE, Chennai . In case of Smitha Shetty v. CCE , the Tribunal examined the question whether penalty was leviable even in bona fide case in the light of several decision of the Tribunal and judgments of Apex Court. The Tribunal came to conclusion that when there was a technical or judicial breach of the provisions of the Act or where the breach flowed from a bona fide belief that the offender was not, liable to act in a manner prescribed in the statute penalty was not imposable even for the minimum amount prescribed and the Tribunal considered the decision of Supreme Court in the case of Hindustan Steel v. State of Orissa , the Tribunal in the case of Smitha Shetty and Co. v. CCE 2003 (57) RLT 543 (CEGAT) has held that when the service provider has acted bona fidely, even the minimum penalty shall be levied. I set aside the penalty under Section 76 and Section 78 applying ratio of aforesaid judgments accordingly. However, as regards imposition of penalty under Section 77 of the Act, the appellants have not filed the returns for half year ending Sept., 2003 and March, 2004 till impugned order-in-original was issued and thus, the penalty under Section 77 of the Act is reduced to Rs. 2000/-, which is maintainable.
3. In view of the reasons given by the lower appellate authority for setting aside penalties under Sections 76 & 78 and reducing of penalty under Section 77, I find no reason to interfere with the impugned order.
4. Accordingly, the department's appeal is rejected.
(Dictated and pronounced in open Court)