COMMISSIONER OF CENTRAL EXCISE Vs. SHREE MOOKAMBIKA ENTERPRISES

JUDGEMENT

(1.) IN this case, vide Order -in -Original No. 21/2003, dated 18 -11 -2003 service tax together with interest was demanded and a penalty of Rs. 57,200 was imposed under the provisions of Section 76 of the Finance Act, 1994 as amended for belated payment of tax during the period 1 -9 -1999 to 30 -9 -2002. Show -cause notice dated 22 -6 -2004 under Section 74 was issued proposing modification of the Order -in -Original by revising the penalty imposed under Section 76 which was calculated at the rate of Rs. 100 to Rs. 200 per week instead of Rs. 100 per day. The notice also proposed imposition of penalty under Section 78. A fresh adjudication order was passed on 25 -10 -2005 enhancing the penalty to Rs. 6,12,894 at the rate of Rs. 100 for every day during the period of delay in payment of tax and dropping proceedings for imposition of penalty under Section 78. The Commissioner (Appeals) set aside the enhancement of penalty on the ground that it cannot be said that the imposition of penalty of Rs. 57,200 was an error apparent on the face of the record requiring correction/rectification under Section 74; hence this appeal by the revenue.

(2.) I have heard both sides. I find that the figure of Rs. 57,200 is not based upon penalty of Rs. 100 per week as the number of weeks during which the payment of service tax was delayed was 160 in which case the penalty which could have been imposed if there was a mistake in holding that 100 rupees per week's delay was required to be imposed would have been Rs. 16,000. The revenue seeks to contend that in any event the penalty cannot be less than Rs. 100 per day as per the statutory provision of Section 76. However, this does not amount to a mistake apparent on the record requiring rectification under Section 74 and if the revenue was aggrieved by the imposition of the penalty of Rs. 57,200, the proper course to have been followed was to issue notice for revision in terms of Section 84 of the Finance Act, 1994 and proceed to pass fresh orders in revision.