COMMISSIONER OF C. EX., RAJKOT Vs. BHAWANI ENTERPRISES

JUDGEMENT

(1.) BRIEF facts of the case are that M/s. Bhawani Enterprises (hereinafter referred as Bhawani for short) is engaged in providing Manpower Recruitment Services. There was delay in payment of service tax during the period from October 2006 to December 2006 and January 2007 to March 2007 and ST -3 returns for the period from October 2006 to March 2007 were filed late. A show cause notice was issued on 22 -5 -2008 which culminated into adjudicating order dated 18 -11 -2008 resulting in imposition of penalty of Rs. 44,600/ - under Section 76 of the Finance Act, 1994 for late payment of service tax and penalty of Rs. 1000/ - under Section 77 of Finance Act, 1994 for late filing of ST -3 returns. On an appeal filed by Bhawani, Commissioner (Appeals) in his order in appeal dated 11 -5 -2009, reduced the penalty under Section 76 to Rs. 10,000/ - by invoking Section 80 of Finance Act, 1994. Against this decision, Commissioner of Central Excise, Rajkot filed an appeal before the Tribunal which was rejected. Thereafter, the Revenue filed a tax appeal before the Honble Gujarat High Court and the Honble High Court set aside the order of this Tribunal rejecting the appeal filed by the Revenue dated 23 -10 -2009 and remanded the matter to decide the issue afresh with following observation [2011 (21) S.T.R. 107 (Guj.)] : -

(2.) THE matter was accordingly listed and notice was sent to Bhawani also but no one has appeared on their behalf. Heard the learned DR.

(3.) THIS Tribunal while passing the order on 23 -10 -2009, rejected the appeal filed by the Revenue and had decided the issue on the basis of precedent decision of this Tribunal. In view of the fact that Honble High Court has laid down the law that under Section 80 of Finance Act, 1994, penalty can be either waived or imposed as per law but there is no provision to reduce it, the appeal filed by the Revenue has to succeed. In this case, the penalty was reduced from Rs. 44,600/ - to Rs. 10,000/ - but as per Section 76 of Finance Act, 1994, penalty has to be either Rs. 44,600/ - or Nil, if it is considered that Bhawani had shown reasonable cause and therefore, discretion to waive penalty could be exercised. In this case, only Revenue is in appeal against the order of Commissioner (Appeals) and Bhawani has not filed any appeal. Therefore, I cannot go into the question as to whether penalty is to be reduced to nil, since there is no appeal by Bhawani and the appellant, Revenue cannot be put in a worse situation than the one as per the Commissioner (Appeals) order. Under these circumstances, the appeal filed by appellant is to be allowed and penalties imposed by original adjudicating authority are to be restored and impugned order passed by Commissioner (Appeals) is to be set aside and I do so. (Pronounced in the Court on 1 -2 -2011)