STATUS CAR RENTALS Vs. CCE

JUDGEMENT

(1.) HEARD both sides. The assessee is in appeal against the order passed by the Commissioner of Central Excise and Customs, Nasik for enhancing the penalty amount to Rs. 1,04,658/ - from Rs. 4.000/ - as imposed by the Assistant Commissioner under Section 76 of the Finance Act. The assessee is engaged in rendering tour operator services and got registered under the provisions of Finance Act 1994. It is alleged that the assessee has failed to pay the service tax and to file return for the period from October 2000 to December 2001 on or before the stipulated period. A show cause notice was issued, on 7.1.2002 for contravention of the provisions under Section 68 and Section 70 of the Finance Act, 1994 and proposing penalty under Section 76 and Section 77 ibid. The Assistant Commissioner (Service Tax), Central Excise and Customs, Nasik -IV accordingly adjudicated the mater and imposed penalty of Rs. 4000/ - under Section 76 and Rs. 300/ - under, Section 77. It is relevant here to mention that the assessee has paid Rs. 70,737/ - with interest thereon amounting to Rs. 7,300/ - before issue of show cause notice for the period pertaining to October 2000 to June 2001. After issue of show cause notice for the period pertaining to July 2001 to December 2001 a sum of Rs. 34,285/ - with interest there on amounting to Rs. 5,500/ - was paid by the assessee. After adjudication order the assessee has also paid penalty of Rs. 4000/ - and Rs. 300/ - as imposed against them. Again the assessee was served a show cause notice by the Revisionary Commissioner proposing to enhance penalty @ Rs. 100/ - per day for which assessee has again suitably replied. There upon he Commissioner Central Excise and Customs (ST), Nagpur has reviewed the matter and enhanced the penalty to Rs. 1,04,658/ - while interpreting the scope and object of Section 76 of the Finance Act and relying upon the Large Bench decision in the case of ETA Engineering Limited v. Commissioner of Central Excise, Chennai . Hence this appeal by the assessee.

(2.) AS seen from the impugned order the Ld. Commissioner has observed that the Assistant Commissioner in imposing lesser penalty of Rs. 4000/ - exercised the discretion which is not vested with him and further more no reason has been assigned properly within the meaning of Section 80 in establishing the fact of reasonable cause for failure to pay the tax amount and failure to file returns. In addition to that the ld. Commissioner did not agree with the reasons submitted by the assessee for late payment of service tax and late filing of returns, as they are found not satisfactory by him.

(3.) THE ld. Counsel for the appellants contends that earlier the assessee was prompt in payment of service tax and also in filing returns but during relevant period due to non availability of the funds and due to not receipt of the payments from the major corporate customers the service tax amount could not be paid in time. This ground appears to be the main ground for their failure to pay service tax.