VIKAS ENTERPRISES Vs. COMMISSIONER OF C. EX., MYSORE

JUDGEMENT

(1.) THE appellant, M/s. Vikas Enterprises, Mysore seeks to vacate penalty of Rs. 2,25,811/ - imposed on them under Section 78 of the Finance Act, 1994 (the Act) by the Commissioner vide the impugned order, passed in terms of Section 84 of the Act. The facts of the case are that M/s. Vikas Enterprises had rendered the taxable service classified under heading "Cleaning Services" during the period January 2006 to December 2006 and did not pay service tax due of Rs. 2,25,811/ -.

(2.) At the instance of the department, after the department issued show -cause notice proposing to demand the tax due and penalize the assessee, the assessee paid the tax due along with applicable interest. After due process of law, the Original authority passed the Order -in -Original No. 38/2008 dated 18 -6 -2008 confirming the demand of Rs. 2,25,811/ -, applicable interest on the above amount and imposing penalties of Rs. 250/ - under Section 77 of the Act and Rs. 56,453/ - under Section 78 of the Act. The Original authority appropriated the tax due of Rs. 2,25,811/ - already paid by the assessee as well as interest amount of Rs. 44,219/ -. Initiating proceedings under Section 84 of the Act, the Commissioner of Central Excise, Mysore held that the assessee had been found by the Original authority, guilty of suppression of facts with intent to evade payment of tax due and it was incumbent upon the Original authority to impose equal amount of penalty as its service tax evaded on the assessee. Accordingly, he enhanced the penalty to Rs. 2,25,811/ - and appropriated the amount of Rs. 56,453/ -already paid by the assessee ordered by the Original authority. In the appeal filed before the Tribunal and during the hearing, it is submitted that the assessee had already paid the tax due along with applicable interest before the order of the Original authority. The Original authority had imposed 25% of the tax demanded under Section 78 on the appellant. The appellant had paid this amount in about two months of the receipt of the Order - in -Original. The assessee is a small provider of service and was not aware of the statutory provisions of Section 78 that entitled him to benefit of 75% of the reduction, if 25% of the penalty was paid within one month from the receipt of the order. It is also submitted that the Revisionary authority had not applied his mind and had ignored all the facts and circumstances of the case which justified waiver of penalties under Section 80 of the Act.

(3.) IN the second decision cited, the Tribunal in a similar case where the Commissioner in revision proceedings had imposed penalty under Section 78 on the appellant, it was held that the appellant therein was liable to pay 25% of the tax, if it made payment within 30 days from the date of communication of the revision order of the Commissioner.