SHRI R. SUKUMAR Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) AFTER examining the parties on stay application, the same is dismissed and the appeal is taken up. The impugned order revises the order passed by the original authority and imposes penalties under Sections 76, 77 and 78 of the Finance Act, 1994. The original authority had dropped the proposal to impose penalties for not following statutory formalities such as registering with the department as service provider, paying service tax and filing periodical returns. The appellant Shri R. Sukumar acted as a out -door caterer during the period October 2005 to October 2006 without registering with the department and did not pay service tax. The tax due of Rs. 1,07,866/ - along with interest due of Rs. 6,935/ - was paid by the appellant before the issue of the Show Cause Notice. The original authority had observed that service tax being a new concept procedural lapses were bound to occur due to lack of understanding and that the assessee deserved sympathetic treatment as regards his penal liability. The original authority had passed the order following the ratio of the decisions of the Tribunal indicated below and a couple of orders of the Commission (Appeals).

(2.) HEARD both sides. The original authority has noted that the investigation report did not indicate any mens rea or contumacious conduct on the part of the assessee to evade service tax. The assessee paid the tax without any dispute and attributed ignorance of law to his the reason for failure to comply with the statutory provisions, I find that the appellant paid the tax due along with interest before issue of the Show Cause Notice. The lower authorities have not found that non payment of service tax and failure to follow other formalities occurred due to the assessee's intention to evade payment of tax. The finding of the original authority about the assessee's ignorance of the tax liability, service tax being a new concept was found acceptance by the Commissioner. He has observed that ignorance of law was not sufficient cause to absolve one from penal liability for violation of statutory provisions. Therefore, I do not find any reason to conclude that the appellant evaded payment of service tax willfully.