Customs, Excise and Gold Tribunal - Delhi
National Insurance Co. Ltd. vs Commr. Of C. Ex. (Appeals) on 23 May, 2006
Equivalent citations: 2006(106)ECC268, 2006ECR268(TRI.-DELHI)
ORDER
S.S. Kang, Vice-President
1. Heard both the sides. Appellants filed this appeal against the impugned order challenging the imposition of penalty only. The amount of service tax along with interest has already been paid before issuance of show cause notice. It is admitted by the appellant that there is delay in depositing of service tax. The contention of the appellant is that there was some fault in the software of their computer, due to which service tax was not paid on the due dates. The contention is that as the service tax along with interest is paid prior to issuance of show cause notice, therefore, no penalty is imposable. The appellant relies upon the decision in the case of CCE v. Top Detective and Security Services Pvt. Ltd. reported in 2006 (3) S.T.R. 443 (Tri.) : 2005 (180) E.L.T. 363 (Tri). The appellant also submitted that Revenue department on 23-9-2004 notified scheme known as extraordinary friendly scheme and under this scheme, if any service provider who got registered up to 30-10-04 are not liable for any penal action. The contention of the appellant is that in certain cases Commissioner (Appeals) set aside the penalty imposed on the assessee on the ground that assessee was registered prior to 30-10-04, and the service provider who has paid the due tax along with interest, they are to be equated with the assessee who got themselves registered under this tax payer friendly scheme and Revenue's appeal against the setting aside of the penalty was also rejected by the Tribunal reported as CCE v. Bharat Security and Works reported in 2005 (188) E.L.T. 454.
2. On the contrary, the Revenue relied on the decision of the Tribunal in CCE, Bhopal v. Mankodi Enterprises reported in 2006 (2) S.T.R. 150 (Tribunal) : 2006 (73) RLT 21 whereby the Tribunal upheld imposition of penalties where the tax was paid after the due date.
3. I have gone through the decision of the Tribunal in the case of CCE, Bhopal v. Mankodi Enterprises reported in 2006 (2) S.T.R. 150 (Tribunal) : 2006 (73) RLT 21 relied upon by the Revenue. In this case service tax was paid after issuance of show cause notice. The service tax was paid even after adjudication order. The facts of the present case are different. In this case the amount of service tax along with interest has been paid prior to issuance of show cause notice. The Tribunal in the case of CCE, Bhopal v. Top Detective and Security Services (supra) which was followed subsequently in the case of CCE, Kolkata v. Eastern Security Concern reported in 2005 (3) STJ 714 which held that if the service tax has been paid prior to issuance of show cause notice, penalty is not sustainable. I further find that Tribunal in the case CCE v. Bharat Security and Works (supra) held as the tax payer friendly scheme was introduced on 23-9-04 and according to this scheme if any service provider who got registered up to 30-10-04 are not liable for any penal action. In the present case, the appellant paid the service tax along with interest prior to introduction of scheme and gave the explanation for late deposit of service tax as there was some problem in their software. Further, I find that Section 80 of Finance Act provides that no penalty was to be imposed on the assessee for any violation contained in Section 76, 77 or 78, if assessee proves that there was reasonable cause for the said failure in the present case. In view of the above discussion and in view of the decisions of the Tribunal if the service tax along with interest was paid prior to issuance of show cause notice, imposition of penalty is not sustainable and hence set aside. The appeals are allowed.
(Dictated and pronounced in the open Court)