CST Vs. CHINTPURNI SECURITIES LTD.

JUDGEMENT

(1.) THE Respondent is engaged in the business of Share Broker service. It has been alleged that there was a delay in filing of return and payment of tax for the period from April, 1999 to March, 2004. The Respondents deposited the tax of Rs. 2,32,308/ - on different dates. A show cause notice was issued proposing demand of interest of Rs. 35,448/ - and penalties. The respondent deposited the interest after receipt of the show cause notice. The Adjudicating Authority confirmed the demand of interest of Rs. 35,448/ - and appropriated the amount deposited by the respondent. He imposed penalty of Rs. 35,000/ - under Section 76 of the Finance Act, 1994 and Rs. 10,000/ - under Section 77 of the said Act. The Revenue issued show cause notice to revise the Adjudication order to enhance the amount of penalty. The Commissioner of Central Excise by the revised impugned order dropped the show cause notice. Hence the Revenue filed this appeal before the Tribunal.

(2.) THE learned DR on behalf of the Revenue, reiterates the grounds of appeal. He submits that the respondents paid the tax before issue of show cause notice without interest. He further submits that they deposited the tax after detection by the Revenue. The mandatory penalty should be imposed.

(3.) AFTER hearing both the sides and on perusal of the record, I find that the Commissioner passed the order following the clarification issued by the Board Circular No. 137/176/06 -CX -IV dated 3.10.07 whereby it is clarified that once the due service tax alongwith interest was voluntarily deposited by the assessee and intimated to the Department, the entire proceedings are deemed to have been concluded. In the present case, the respondents deposited the tax voluntarily and interest was paid in pursuance to the show cause notice. Therefore, the Board Circular is not applicable herein. But it is noticed that the Commissioner dropped the proceedings on the ground that there is no allegation of any malafide intention. The Revenue has not challenged this finding of the Commissioner. I also notice that taking into consideration of account of tax and interest, the Adjudicating Authority rightly imposed penalty. So, there is no reason to interfere with the order of the Commissioner of Central Excise. Accordingly, the appeal filed by the Revenue is rejected.