Custom, Excise & Service Tax Tribunal
The Commissioner Of Central Excise vs Madhuri Travels on 22 February, 2008
IN THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No.II APPEAL No.ST/22/08 Appln.No.ST/COD/206/08 (Arising out of Order-in-Appeal No.P-I/BBP/137/07 dated 28/09/2007 passed by Commissioner of Central Excise & Customs (Appeals), Pune) For approval and signature: Honble Mr. M.V. Ravindran, Member (Judicial) ====================================================
1. Whether Press Reporters may be allowed to see :
the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy :
of the Order?
4. Whether Order is to be circulated to the Departmental : authorities?
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The Commissioner of Central Excise,
Pune Appellants
Vs.
Madhuri Travels Respondents
Appearance:
Shri.U.H.Jadhav, JDR for Appellants
Shri.M.P.S. Joshi, Advocate for Respondents
CORAM:
Mr. M.V. Ravindran, Member (Judicial)
Date of Hearing : 22/02/2008
Date of decision : 22/02/2008
O R D E R No:..
Per: Shri M.V.Ravindran, Member (Judicial)
1. This appeal is listed for condonation of delay in filing the appeal.
2. Heard both sides.
3. The application for condonation of delay specifically states that there is a delay of twenty days in filing the appeal. At the same time on perusal of the authorization, I find that the authorization does not have any date, there is only blank column, hence, it is not possible for me to come to conclusion whether the delay is only for twenty days or otherwise. Despite this, the application for condonation of delay is allowed. As the issue involved in this case is in a very narrow compass, the appeal itself is taken up for disposal.
4. Revenue is aggrieved by the order of the Ld. Commissioner (Appeals) on the ground that the Commissioner (Appeals) has reduced the penalty imposed under the provisions of Section 76 of the Finance Act, 1994. It is the submission of the Ld. JDR that the Provisions of Section 76 have no mandate for reduction of any penalty. He reads the Section 76 of the Finance Act, 1994 and submits that minimum penalty of Rs.100/- is mandatory and penalty imposed under this Section cannot be reduced.
5. The Ld. Counsel on the other hand submits that in an identical issue wherein the Tribunal had reduced the penalty under Section 76, revenue had taken it up in appeal to the Honble High Court in Civil Appeal No.213/06. He submits that the Honble High Court upheld the reduction of penalty, as ordered by the Tribunal and produces before me an unsigned copy. He also submits that the ratio of the Honble High Court is followed by Co-ordinate Bench in the case of Siemens Nixdorf Information System Ltd., Vs. CCE, Mumbai, as reported at 2007 (8) STR 480 (Tri.-Mumbai). He submits that the issue before this Bench is squarely covered by the decision of the Co-ordinate Bench.
6. The respondent is not in appeal against the penalty imposed by the Commissioner (Appeals) and they have paid off the said penalty.
7. Considered the submissions made by both sides and perused the records.
8. Revenues grievance mainly is that the Commissioner (Appeal) does not have any power to reduce the penalty imposed under Section 76. I find that the Commissioner (Appeals) while reducing the penalty imposed under Section 76 has invoked the Provisions of Section 80 of the Finance Act, 1994. It is seen from records that the Commissioner (Appeals) has held that reasonable cause is shown by the respondent herein for non-filing of the returns in time and for delay in paying service tax.
9. I find that the order of the Tribunal in the case of Siemens Nixdorf Information System Ltd. (supra) squarely covers the issue in favour of the respondent, I may read the same.
I have heard both sides. I note that in the case of DR Gade Vs. CC Nasik (2006 (2) STR 205) the Tribunal relied upon Section 80 of the Finance Act, 1994 which provides that Notwithstanding anything contained in the provisions of Section 76, 77, 78 and 79 no penalty shall be imposable on the assessee for any j failure referred to in the said provisions, if the assessee proves that there was reasonable cause for the said failure, to reduce the penalty imposed upon the appellants by noting that interest amount paid was about 40% of the Service Tax and therefore, any pecuniary advantage gained by the appellant is neutralized. The revenue has challenged this decision by filing Central Excise appealNo.213 of 2006 before the Honble Bombay High Court which by its order dated 26/07/2007 accepted that the reduction in penalty was purely an exercise in discretion based upon the finding on fact. I(n other words, the High Court held that on consideration of Section 76 and 80, there is discretion in the authority of not imposing penalty. Following the ratio of the above order, and noting the plea of the appellants that they were of the process being taken over by the foreign company in Japan which resulted in late submission of return and late payment of service tax, I reduce the penalty under Section 76 to Rs.1,00,000/- (Rupees on lakh only). However, the penalty under Section 77 is upheld.
10. The contention of the JDR is that this would amounts to rewriting of the Section, in the statute. I find that Judicial discipline requires that orders of the High Court, has to be followed by the Tribunal.
11. In my view that the issue in this case is squarely settled by the judgement and the order of the Honble High Court in civil appeal No.213/06.
12. Accordingly, I do not find any merit in the appeal filed by the revenue. The appeal is rejected.
(Dictated in Court) (M. V. Ravindran) Member (Judicial) pj 1 4 2