UNION OF INDIA Vs. DIAL AND TRAVEL

JUDGEMENT

(1.) HEARD learned Counsel for the parties.

(2.) THIS application under Section 35H of the Central Excise Act as it existed on 1st April, 2002 r/w Section 83 of the Finance Act, 1994 containing the provisions relating to levy and collection of service -tax is directed against the order of Customs, Excise and Gold Control Tribunal, New Delhi, to state the case and refer the following question of law for the decision of this Court:

(3.) THE respondent is a provider of services as travelling agent and is filing its regular returns and paying service -tax since September, 1999. A show -cause notice was issued to the respondent by the adjudicating authority of the Central Excise Act as to why a penalty should not be imposed upon them under the provisions of Section 70 of the Finance Act, 1994, and why the amount of service -tax recoverable from them along with interest @ 1.5 per cent per month payable in accordance with provisions of Section 75 of the Act of 1994 should not be recovered from them in terms of Section 76 and why a penalty should not be imposed upon them under Section 76. The assessee has submitted its reply vide letter dt. 6th Oct., 2000 stating that: They were very regular in remitting the service -tax and submitting the returns since registration. During October, 1998, they came to know that henceforth the same at source. Subsequently, they have written to their principal who would deduct - Indian Airlines. But in spite of several reminders reply is still awaited. The assessee further submitted that on persuasion from the Department, Shri Ashok Jain, proprietor of the firm, met with the officers of the Department who cleared the situation and convinced that service -tax is leviable on the services rendered by them. As soon as they were ready to deposit the service -tax they came to know that their official staff have cheated them in the way that they have misappropriated an amount around one lakh twenty -five thousand rupees. The photocopy of the letter submitted to the DIG Police, Jodhpur, enclosed with the letter and further submitted that meanwhile, in order to pay the principal, Indian Airlines, the money was arranged from the friends and relatives. However, having remitted the service -tax and interest payable the return for half -year ending March, 1999 and submitted on 20th Sept., 2000. The assessee has further submitted that they did not have any intention to escape from or breach the Service -tax Rules and requested to decide the case with a sympathetic view in the matter. These facts were not in contention and were accepted by the adjudicating authority and considering these facts he was of the opinion that it is a fit case for taking a lenient view of the matter and considering the provisions of Section 77, he imposed the minimum imposable penalty under the aforesaid provisions which amounted to Rs. 12,900 and under Section 76 and Rs. 9,863 under Section 76.