KONGU ENGINEERING COLLEGE Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appellants who are educational institution are challenging the imposition of penalty of Rs. 70,000/ - for delay in payment of service tax leviable upon them. According to the appellants, they are not liable to pay any penalty for the reason that there was a reasonable cause for the failure to pay the tax as they were an educational institution and they had paid service tax leviable prior to the issue of the show -cause notice and, therefore, in terms of Section 80 of Chapter V of the Finance Act, no penalty ought to have been imposed.

(2.) I have heard both sides and find no merit in the plea for the reason that the service tax demand confirmed by application of the extended period of limitation on the ground that the assessees suppressed the fact of rendering service has not been challenged by them and, therefore, hold that Section 80 of the Act does not come to their rescue. The alternate prayer for reduction in the quantum of penalty which is nearly the maximum prescribed also cannot be acceded to as the penalty has already been reduced from Rs. 1,33,594/ - equal to the service tax demand to Rs. 70,000/ - by the lower appellate authority. No ground has been made out for any further reduction. I, therefore, uphold the impugned order and reject the appeal.