Penalty

CESTAT, Kolkata Bench

Golden Security Service

v.

commissioner of Central Excise, Siliguri

D.N. PANDA, JUDICIAL MEMBER

ORDER NO. A-679/KOL/2007

SERVICE TAX APPEAL NO. -39/06

April 20, 2007

Section 76 of the Finance Act, 1994 - Penalty - For failure to pay service tax - In terms of assurance of Government that there shall be no coercive measure of law if service providers seek registration before 30-11-2004, assessee got itself registered on 25-3-2004 and deposited tax and interest amount demanded - Whether penalty would be imposable upon assessee - Held, no [Para 3.1]

FACTS

Service tax along with interest was demanded from assessee appellant and penalty was imposed upon it. In terms of the assurance given by the Government that there shall be no coercive measure if the service providers come forward seeking registration before 30-11-2004, the assessee got itself registered on 25-3-2004 and also deposited tax and interest amount demanded. In the instant appeal, the assessee sought for waiver of penalty levied upon it.

On appeal :

HELD

The appellate authority found that the appellant was registered before 30-11-2004 and it was liable to service tax for the services rendered. So far as the penalty was concerned, the appellant having volunteered to seek registration before 30-11-2004, the Commissioner (Appeals) should have considered conduct of the appellant who volunteered to deposit taxes and interest already demanded. Levy of penalty would be a hardship when it sought registration and came forward to comply to the law. Because penalty shall be leviable for the breach of law, that should not be done relying on the judgement in the case of Hindustan Steel Ltd. v. State of Orissa 1978 (2) ELT (J159) (SC), EID Parry (I) Ltd. v. Commissioner [2003] (156) E.L.T. 753 (Mad.). Therefore, there should be upon penalty imposable on the appellant. [Para 3.1]

There being no dispute of the tax and interest payable by the appellant, the deposits if any, made by the appellant towards interest and service tax as per order in original might be verified and shortfall if any, might be recovered. If there was any excess deposit, that should also be refunded. Therefore, the impugned order passed by the Commissioner (Appeal) was modified to the indicated extent and the appeal was to be allowed. [Para 3.2]