COMMISSIONER OF C. EX., RAJKOT Vs. PORT OFFICER

JUDGEMENT

(1.) M /s. Gujarat Maritime Board, Okha Port and Sub Port Rupen, Dist. Jamnagar (hereinafter referred as Assessee) has held the registration certificate as service provider of port services during the period from 11 -9 -2004 to 13 -9 -2004 and there was a short payment of service tax to the extent of Rs. 93,621/ - because the assessee failed to discharge the service tax at the rate of 10% towards service tax and 2% towards education cess and paid service tax at the rate of 8%. The show cause notice was issued on 23 -6 -2006 requiring the assessee to pay differential service tax and also proposing to impose penalty under various sections of Finance Act, 1994. In the first round of litigation, the matter reached the Tribunal and this Tribunal vide order No. A/2372/WZB/AHD/2007 dated 3 -9 -2007, set -aside the order passed by Commissioner (Appeals) and remanded the matter to original adjudicating authority for de novo consideration with directions to the assessee to produce all the evidences before original adjudicating authority. Thereafter, the matter was adjudicated and on an appeal filed by the assessee, Commissioner (Appeals) passed order No. 117/2008 dated 5 -5 -2008, wherein he reduced the penalty under Section 76 to Rs. 10,000/ - from Rs. 20,000/ - and set -aside the penalty under Section 78 of the Finance Act, 1994. Against this order, Revenue filed an appeal before this Tribunal and this Tribunal vide order No. A/2836/WZB/AHD/2008 dated 29 -12 -2008, rejected the appeal filed by the Revenue. Against this decision, Revenue filed an appeal before the Honble Gujarat High Court and the Honble High Court remanded the matter to the Tribunal with following observations : -

(2.) THERE is no dispute that service tax was payable on the services rendered at the rate of service tax 10% towards service tax and 2% service tax towards education cess. There is also no dispute that differential service tax became payable because of the failure of the assessee to collect the service tax at the rate of 10.2% instead of 8% during the period from 10 -9 -2004 to 13 -9 -2004. The grievance of the Revenue is that Commissioner (Appeals) has reduced the penalty under Section 76 from Rs. 93,180/ - to Rs. 10,000/ - and it is Revenues contention that the provisions of Section 76 are unambiguous and did not provide any liberty to reduce the penalty and it is to be either amount fixed in Section 76 or Nil. The Revenue has relied upon the decisions of the Tribunal in the case of ETA Engineering Limited 2006 (3) S.T.R. 429 (Tribunal - Larger Bench) = 2004 (174) E.L.T. 19 (Tribunal -LB).

(3.) LEARNED Chartered Accountant on behalf of the assessee relied upon the following decisions to support his contention that there is discretion to reduce the penalty under Section 76 of Finance Act, 1994 : -