CCE Vs. SANCHAR BHARTI P. LTD.

JUDGEMENT

(1.) IN this appeal, the Revenue is challenging the order of the Commissioner (Appeals) reducing the penalty imposed on the respondents. Relevant facts are that the respondents were engaged in sound recording services and service tax was levied on these services w.e.f 16th July, 2001. The respondents defaulted in making the payment of service tax for the period from July 2001 to March, 2002 but subsequently paid the service tax and interest on service tax. The adjudicating authority imposed penalty of Rs. 28,933 and Rs. 10,020 on the respondents under Section 76 of the Finance Act 1994. Against this imposition of penalty the respondents preferred an appeal before the Commissioner (Appeals) who reduced the penalty from Rs. 28,933 to Rs. 15,000 and from Rs. 10,020 to Rs. 5000. The department was aggrieved by this reduction and challenged the order before the tribunal.

(2.) NONE appeared for the respondents in spite of notice. The learned D.R. submits that as per provisions of Section 76 of the Finance Act 1994 minimum penalty of Rs. 100 has to be charged per day for the period of non -payment of penalty. He submits that in both the cases, the Adjudicating authority has correctly imposed the penalty under the provisions of Section 76. Hence, he submits that since, Section 76 is very clear the learned Page 83 Commissioner (Appeals) ought not to have reduced the penalty in the impugned order. He prays for setting aside the impugned order.

(3.) CONSIDERED the submissions of learned D.R. and perused the papers. The Commissioner (Appeals) in her order have reduced the penalty after considering the situation prevalent in respect of the respondents' case. She has considered the fact that since, sound recording services came into service tax net from 16th July, 2001 and since the respondent having small structure of business with limited resources there was inadvertent delay in payment of service tax. Learned Commissioner (Appeals) has also considered the fact that the respondents have, in fact, deposited the total service tax and interest thereon. Section 80 of the Finance Act 1994 reads as under: