CCE Vs. FIRST FLIGHT COURIERS LTD.

JUDGEMENT

(1.) The stay application and the appeal are taken up together for disposal as the issue involved is a short one. The appellants had apparently deposited the Service Tax in the matter. The Additional Commissioner had imposed a penalty of Rs. 3,03,300/ - @ Rs. 100/ - for each day of delay in remittance tax during the period from April 1998 to September 1998 under Section 76 of Finance Act, 1994. There is another penalty of Rs. 4,000/ - @ Rs. 2,000/ - per return, which has been filed late under section 77 of the Finance Act, 1994.

(2.) The learned Counsel submits that the appellant company's staff were under strike and there was no intention to evade duty in the matter. The records were all in the custody of the personnel and the management was prevented from taking steps for payment and in view of this extenuating circumstances, the tax could not be paid. The learned Counsel submits that every default cannot be considered as a case for review of penalty and extenuating circumstances are required to be taken care of by the Commissioner. She also points out that the Commissioner has not given any finding on the penalty and contends that the matter could be disposed of by this Bench itself as the assessee does not desire remand of the matter. She submits that the Apex Court in the case of Hindustan Steel Ltd. Vs. State of Orissa - 1978 (2) ELT 159 has held that penalty is not required to be imposed on each and every lineal breach of provisions of law and the adjudicating authority can take into consideration the factors preventing the party from depositing the tax and reduce the penalty. She submits that the Commissioner of Central Excise Delhi -I, in the case of Oriental Insurance Co. Ltd. - 1998 (103) ELT 459 (Commr. Appl.) has taken a view in similar facts and circumstances and held that penalty is not imposable for making delayed payments in case where the party had committed certain procedural lapses. The Commissioner has relied on the judgment of the Apex Court rendered in the case of Serai Kella Glass Works Pvt. Ltd. Vs. Collector - 1997 (91) ELT 497 (SC). She also relied on the Tribunal's ruling rendered in the case of CCE, Bangalore Vs. S.B. Gopalakrishna - 2004 (164) ELT 158(Tri. -Bang.) wherein the Tribunal has held that the quantum of penalty is discretionary and a minimum penalty can be imposed in lineal breach and the penalty has been reduced in the matter. The Tribunal has relied on the judgment rendered in the case of V. Shanmughavel (DR) Vs. CCE, Chennai -2001 (131) ELT 14.

(3.) The learned SDR points out to the Additional Commissioner's finding wherein it has been noted that during the relevant period, there was no strike. However, the learned Counsel produces certain documents to show that during the relevant period, there was strike and the appellants were prevented from carrying out the regular activity.