CCE Vs. RASI TRAVELS AND CARGO PVT. LTD.

JUDGEMENT

(1.) THIS is a revenue appeal. In the impugned order the Commissioner (Appeals) reduced the penalties imposed on the respondents under various sections of the Finance Act, 1994 (the Act). The respondents had failed to follow the provisions of Finance Act, 1994 and also failed to pay the service tax due on the service of travel agents rendered during October, 2002 to September, 2003. After due process of law the original authority demanded service tax of Rs. 2,54,770/ - and appropriated an amount of Rs. 2,22,909/ - already paid by them. Interest due for delay in payment of service tax was also demanded. Penalty of Rs. 30,000/ - under Section 78, Rs. 1000/ - under Section 77, Rs. 10,000/ - under Section 76 and Rs. 500/ - under Section 75A were imposed. In the appeal before the Commissioner, the respondent submitted that they had sought permission of the Chennai -II Commissioner to allow them (Kumbakonam Unit, the appellant) to follow centralized billing at Chennai. Their request was rejected by the communication dated 26.09.2003. Immediately after that they started paying the service tax. Delay had occurred in paying tax owing to the belated reply from the Commissioner.

(2.) IN the impugned order the Commissioner (Appeals) upheld the demand for service tax and the appropriate interest. The Commissioner (Appeals) found that the service tax being a new levy, the respondents were not familiar with the procedures relating to registration etc. Moreover, delay in payment of tax by Kumbakonam branch had occurred due to the delay in receipt of reply to their representation from the authorities. The Commissioner (A) found that the respondents were not aware of the formalities and therefore, their existed sufficient cause which occasioned the failures attracting penalties. Relying on various case law, he found that the penalties imposed on the respondents deserved to be reduced. Accordingly, he reduced the penalty imposed under Section 76 from Rs. 10,000/ - to Rs. 1000/ - and reduced the penalty under Section 78 from Rs. 30,000/ - to Rs. 3000/ -. He did not interfere with the penalties imposed under Section 75A and Section 77.

(3.) I have considered the case records and the submissions by the departmental representative. Nobody is present representing the respondent. I find that the Commissioner (Appeals) reduced the penalties following case law where penalties were reduced finding that the failures of the appellants therein inviting penalties under Sections 76, 77, 78, and 79 of the Act had occurred owing to reasonable cause. Penalties were reduced in terms of Section 80 in the said cases, as in the impugned order.