COMMISSIONER OF CENTRAL EXCISE Vs. KEMCO AGENCIES

JUDGEMENT

(1.) THIS appeal is directed against Order -in -Appeal dated 12 -8 -2005 wherein the Commissioner (Appeals) has reduced the penalty imposed on the respondents.

(2.) CONSIDERED the submissions made by both sides and perused the record. I find that the respondents are not challenging the imposition of service tax and interest thereon and penalty imposed Under Section 75A and 77 which were upheld by the Commissioner (Appeals). The department's appeal in this case is directed against reduction of penalty by the Commissioner (Appeals) from Rs. 94,300/ - to Rs. 25,000/ - imposed Under Section 76 of the Finance Act, 1994.

(3.) THE provision of Section 76 under the Finance Act, 1994 during the relevant period reads as under: - Section 76 - Penalty for failure to collect or pay Service Tax. - Any person, liable to pay service tax in accordance with the provisions of Section 68 or the rules made there -under, who fails to pay tax shall pay in addition to paying such tax; and interest on that tax in accordance with the provisions of Section 75, a penalty which should not be less than one hundred rupees but which may extend to two hundred rupees for every day during which such failure continues, so, however, that the penalty under this clause shall not exceed the amount of Service Tax that he failed to pay. From the reading of the above it is very clear that imposition of penalty Under Section 76 is minimum of Rs. 100/ - per day for default of payment of Service Tax. Hence, the amount calculated cannot be reduced to less than Rs. 100/ -per day. To my mind the reduction of penalty by the Commissioner (Appeals) Under Section 76 is beyond the purview of the provisions of the law.