ETA ENGINEERING LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THIS case was referred to the Larger Bench by South Zonal Bench at Chennai for resolving the conflict in the views expressed by the Two Co -ordinate benches of the Tribunal on the issue of imposition of penalty under Section 76 of the Finance Act 1994 for failure to collect or pay service tax.

(2.) THE appellants are engaged in manufacture and installation of air conditioning systems. It was alleged that during the period from October, 1998 to 2001, they provided services as Consulting Engineers but they did not got registered with the Department and pay Service tax as Consulting Engineer. Show Cause notice was issued to them by the department demanding Rs. 1,28,217/ -towards service tax on services provided by them during the aforesaid period. Penalty was also proposed on the appellants under Sections 76, 77 & 78 of the Finance Act, 1994 and interest on the tax not paid. On adjudication the original authority confirmed the demand of the tax with interest thereon and imposed a penalty of Rs. 100/ - per day subject to maximum of Rs. 1,28,217/ - under Section 76 ibid. Penalty of Rs. 1,000/ - was also imposed under Section 77. On appeal, before the Commissioner (Appeals), the order of the original authority was upheld.

(3.) SHRI N. Venkataraman, ld. Advocate for the appellants pleaded that the appellants are not contesting demand of service tax in this case. They are contesting the penalty under Section 76 of the Finance Act 1994. He pleaded that Section 76 did not authorise levy of penalty of Rs. 100/ - per day for the period of default of payment of service tax. He pleaded that it was Rs. 100/ - in absolute terms subject to maximum of Rs. 200/ - per day. He relied upon the following decisions of the Tribunal: