COMMISSIONER OF C. EX. Vs. SCIENCE CENTER

JUDGEMENT

(1.) THE Revenue has challenged the order dated 25 -1 -2007 made by me Commissioner (Appeals -I) to the extent that it modifies the order -in -original by setting aside the penalties imposed under Sections 76, 77 and 78 of Chapter V of the Finance Act, 1994. The fact that Service tax of Rs. 1,93,238/ - was due along with interest from the respondent -assessee was never in dispute. However, since the assessee had deposited the Service tax in piecemeal on various dates as noted in paragraph 4 of the impugned order, the Appellate Commissioner held that, no penalty can be imposed when the duty was paid before issuance of the show cause notice. He placed reliance on the decision of the Larger Bench of the Tribunal in CCE, Delhi -III Gurgaon v. Machino Montell Ltd. , in support of his findings.

(2.) ADMITTEDLY , the appellant did not deposit interest and penalty amounts as contemplated by the provisions of Section 78 of the said Act, which is similar to Section 11AC of the Central Excise Act, 1944. Therefore, the appellant was not entitled to the benefit of the lesser penalty of 25% of the Service tax determined as contemplated by the first proviso to Section 78 of the said Act.

(3.) THE decision of the Larger Bench in CCE, Delhi -III Gurgaon v. Machino Montell Ltd. (supra) was reversed by the High Court of Punjab and Haryana in CCE v. Machino Montell Ltd. , in support of his finding.