SHREE SUTHAN PROMOTORS Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE challenge in the present appeal is only to the imposition of penalties under Section 76, 77 and 78 of Chapter V of the Finance Act, 1994 - - the demand of service tax together with interest stands paid and is not challenged.

(2.) I have heard both sides. I find force in the submission that penalty imposed under the provisions of Section 78 is not sustainable for the reason that the penalty under the above mentioned provision can be imposed only if service tax has not been levied or paid or has been short -levied or short -paid or erroneously refunded, due to fraud or collusion or wilful mis -statement or suppression of facts or contravention with intent to evade payment of service tax and review show -cause notice issued by the Commissioner does not allege any one of these five ingredients. Although the notice states that the assessees got registered, filed returns and paid service tax only after detection by the department by the department, this averment is not enough to hold that the notice has alleged fraud or suppression of facts etc., against the assessees. I, therefore, set aside the penalty imposed under Section 78 of the Finance Act, 1994. As regards the penalty under Section 76, I do not see force in the submission of the assessee that they had a reasonable cause for failure to register and file returns and pay tax, as the reason adduced by them is ignorance of law and interpretation of statutory provisions, which is not sufficient to extend the shelter under Section 80 of the Finance Act, 1994. I, therefore, uphold the penalty under Section 76. However, in the absence of any grounds relied upon by the Commissioner to impose the maximum penalty of Rs. 200/ - per day under Section 76, I reduce the penalty to Rs. 100/ - per day, which is the minimum penalty under Section 76. Penalty of Rs. 1,000/ - under Section 77 is upheld.