COMMISSIONER OF C. EX. Vs. ASHOK SECURITY SERVICES

JUDGEMENT

(1.) THIS appeal filed by the Revenue is against an order dated 18 -2 -05, of the Commissioner of Central Excise (Appeals), Madurai wherein he affirmed the demand of service tax of Rs. 1,19,511/ - along with appropriate interest and reduced the penalties of Rs. 10,000/ - imposed under Section 76 and Rs. 1,19,511/ - imposed under Section 78 of the Finance Act, 1994 to Rs. 5,000/ - and Rs. 25,000/ - respectively. The appeal seeks to restore the penalties.

(2.) THE facts of the case are that M/s. Ashok Security Services, Tirunelveli had rendered security service to various persons during the period 16 -10 -98 to 31 -8 -03 without following the legal formalities, such as registering itself as 'service provider' with the Central Excise department, filing returns etc. After following due process of law, the original authority demanded an amount of Rs. 1,19,511/ - being the service tax due and not paid, along with equal amount being interest due. Penalties of Rs. 500/ - each was imposed under Section 75A and 77 of the Finance Act, 1994. He also imposed penalties of Rs. 10,000/ - under Section 76 and Rs. 1,19,511/ - under Section 78 of the Finance Act, 1994.

(3.) IN the appeal filed by the Revenue, it is submitted that the respondent had paid the service tax due and the interest thereon on being pointed out by the department. The Revenue's challenge is confined to the reduction of penalties imposed under Sections 76 and 78 of the Finance Act, 1994 by the Commissioner (Appeals). It is submitted that as per Section 76, the penalty should not be less than an amount computed at the rate of Rs. 100/ - per day for the delay in payment which, however, was not to exceed the tax due and not paid. As far as penalty under Section 78 was concerned, the penalty had to be not less than the service tax evaded, the same being the minimum prescribed. Learned SDR relies on a decision of a single member of the Tribunal in Commissioner of Central Excise, Madurai v. Pandian Hotels Ltd. 2006 (3) S.T.R. 416 (Tri.) : 2005 (180) E.L.T. 458 (Tri. -Chennai). In the said decision, the assessee had paid the service tax due after a delay of 330 days and the Tribunal found that the assessee had not established that there was 'reasonable cause' for its failure to pay the tax in time. The Tribunal, therefore, decided that minimum penalty prescribed under Section 76 had to be imposed on the assessee. None appeared for the respondents despite notice nor is there any request of theirs for adjournment. Hence I take up the appeal.