AJAY SOMANI AND COMPANY Vs. CCE

JUDGEMENT

(1.) THIS appeal is directed against review order dated 10/01/06.

(2.) THE issue involved of this case is regarding the enhancement of penalty under Section 76 of the Finance Act, 1994 by the Commissioner as a revising authority. The appellant is a Chartered Accountant engaged in providing the services of chartered accountant services and during the period October to December 2001 and April to June 2002, delayed the payment of service -tax by almost 88 days in both the quarters. Show cause notice was issued to him for imposition of penalty on the delayed payment on the service tax as per the provisions of Section 76 of the Finance Act, 1994. Adjudicating authority imposed the penalty of Rs. 500/ - on the appellant under Section 76 of the Finance Act, 1994. Appellant did not prefer any appeal against such order. The learned Commissioner as a revisionary authority issued show cause notice to the appellant indicating his intention to review the said order in original. Appellant did not appear before the revisionary authority nor did he file any written submission. The learned Commissioner after considering the evidence on records came to the conclusion that order in original imposing penalty of Rs. 500/ - is to be revised for imposition of penalty as provided under Section 76 of the Finance Act, 1994. Hence this appeal.

(3.) HEARD the learned DR and perused the records. Considered the written submissions filed by the appellant. The main contention of the appellant in the written submission as well as in the grounds of appeal is that the appellant being a new entrant into the Service Tax Act was not aware of his responsibilities of discharge of service tax within time. He also relied upon the decision of the Tribunal in the case of Smitha Shetty v. CCE, Bangalore as reported at and also on the decision of the Hon'ble Supreme Court in the case of Hindustan Steel v. State of Orissa as reported at for the proposition that the penalty should not be imposed unless the party either acted deliberately in defiance of the law or was guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligations. It is seen from the records that the appellant had taken the service tax registration certificate in the year 2001 as a provider of chartered accountant services. The appellant did not deposit the service tax for the period October to December 2001 and April to June 2002. This would indicate that appellant had discharged the service tax liability for the period January to March 2001, though not very clear from the records. It is also seen from the records that the appellant had not challenged the order in original imposing of penalty under Section 76 of the Finance Act 1994. In the absence of any challenge to the said order in original the appellant has accepted the imposition of penalty under Section 76. If that be so, the provisions of Section 76 would apply in its entirety. The provisions of Section 76 indicate that penalty has to be imposed at the rate of Rs. 100/ - per day till the default continued. The Larger Bench of the Tribunal in the case of ETA Engineering Ltd. v. CCE, Chennai as reported at has held as under: 6. On careful consideration, we find that there are orders passed by the Tribunal on this issue where conflicting opinions have been expressed. In case of Harilal and Co. v. CCE, Mumbai -I , it was held that minimum penalty is Rs. 100/ - for each day of delay. Same view was taken in CCE, Jaipur v. Milan Tent Palace 2000 (131) E.L.T. 274. There are contrary decision also as relied upon by the appellant. On careful examination of the provisions of Section 76, which is as under: