ASHWANI AND ASSOCIATES Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THIS appeal has been filed by the appellants against the order -in -appeal dated 3 -8 -1998 passed by the Commissioner of Customs (Appeals) vide which he confirmed the order -in -original of the Superintendent of Central Excise (Service Tax) imposing penalty of Rs. 14,969/ - under Section 76 and Rs. 5,100/ - under Section 77 of the Finance Act on the appellants. The appellants have challenged the validity of the impugned order on the ground that no opportunity was afforded to them to prove that they had a sufficient cause in terms of Section 80 of the Finance Act for not filing the return and making the due payment of the tax in time. They were also not aware of the intricacies of the law which was introduced for the first time in July, 1994 and the penalty has been wrongly imposed on them for non -payment of Service Tax for the period July, 1994 to September, 1994.

(2.) WE have heard both the sides. The learned consultant for the appellants has contended that the order -in -original of the Superintendent of Central Excise (Service Tax) is not speaking one but is creptive and has been passed without affording any opportunity to the appellants. He has further contended that even the Commissioner of Customs (Appeals) while disposing of the appeal has failed to go into this aspect of the matter and dismissed their appeal without affording them any opportunity for proving the sufficient cause under Section 80 of the Finance Act for having not filed the return in time and paid the due service tax. Therefore, the impugned order should be set aside. In support of his contention, he has placed reliance on the case of Mukund K. Roongta v. CCE, Jaipur, 1999 (107) E.L.T. 38 (T), wherein the Tribunal has taken a view that mere delay in filing of the service tax return is not enough to impose penalty on the assessees when the entire amount of tax has been deposited and when no show cause notice was issued to them under Section 70(2) of the Finance Act. Another case referred to by the learned consultant is Rajinder Kumar Somani v. CCE, Kanpur, 1999 (113) E.L.T. 111 (Tribunal), wherein for late filing of the returns for four successive quarters, the penalty amount was reduced by taking lenient view on the ground that the assessee did not have knowledge about the newly introduced law regarding the payment of service tax. The learned JDR, on the other hand, has not been able to refute the contention of the learned consultant that the order -in -original of the Superintendent of Central Excise (Service Tax) not speaking one and no opportunity of hearing was also afforded to the appellants before passing the same. He has fairly conceded that the impugned order be set aside and the case be sent back to the original assessing authority for fresh decision.

(3.) WE have gone through the file. The perusal of the order -in -original passed by the Superintendent of Central Excise (Service Tax) shows that he had passed the same in routine casually and there is nothing on the record to show that he even issued any show cause notice to the appellants before imposing any penalty on them under Sections 76 and 77 of the Finance Act. We find that no opportunity of hearing was also afforded to the appellants. Even the Commissioner of Customs (Appeals) has also failed to consider the plea of the appellants that they had a sufficient cause for not filing their return in time and paying the due service tax as they were not aware of the intricacies of the law which was introduced in July, 1994. Therefore, the order has been passed in violation of the principles of natural justice. Resultantly, the impugned order of the Commissioner of Customs (Appeals) in which the order of the Superintendent of Central Excise (Service Tax) had merged is ordered to be set aside and the matter is sent back to the Superintendent (Service Tax) for fresh decision after affording a reasonable opportunity to the appellants to prove their sufficient cause in terms of Section 80 of the Finance Act and then pass a fresh speaking appealable order, as per law. Accordingly, the appeal is allowed by way of remand.