Penalty
CESTAT,
Sai
Motors
v.
Commissioner
of Service Tax
DR.
S. L. PEERAN, JUDICIAL MEMBER
STAY
ORDER NOS. 711 TO 714 OF 2007
APPEAL
NO: ST/ST/155/2007 IN ST/215/2007, ST/ST/156/2007 IN ST/216/2007,
ST/ST/157/2007, ST/ST/217/2007 AND
SEPTEMBER
5, 2007
Section 80 read with section 86 of the Finance Act, 1994 - Penalty - Not to be imposed in certain cases - Period July 2003 to February 2005 - Assessees were engaged in activity of servicing of motor vehicles and were registered under category of Authorised service station - After being pointed by department they discharged service tax short paid for relevant period along with interest - However, subsequently, show cause notice was issued to assessee alleging that for said period they had not taken registration under category of ‘business auxiliary service’ and had failed to pay service tax - On adjudication, Asstt. Commissioner on finding that assessee had no intention to evade tax and short levy had been paid immediately with interest did not proceed to levy penalties under section 76 and 77 and imposed lessor penalty under section 78 - Commissioner reviewed said order of Asstt. Commissioner and had imposed penalties under section 76 and 77 and had enhanced penalty under section 78 - Whether findings of Assistant Commissioner to drop levy of penalty under section 76 and 77 to levy lesser penalty under section 78 in view of powers conferred under section 80 prima facie appeared to be just and proper - Held, yes - Whether therefore waiver pre-deposit of penalties imposed and enhanced in impugned order was to be granted - Held, yes [Para 5]
The assessees were engaged in the activity of servicing of motor vehicles and were registered under the category of ‘authorised service station’. The officers of department listed the place of assessees and pointed out about its short payment of service tax for period July 2003 to February 2005. The assessees after noticing the short payment discharged the same. However a show cause notice was issued to assessees alleging that for said period they had not taken registration under category of ‘Business auxiliary service’ and had failed to pay service tax. On adjudication, the Assistant Commissioner after due consideration of the matter did not proceed to levy penalties on assessees under sections 76 and 77 but it had imposed penalty under section 78. However, Commissioner reviewed said order and imposed penalties under section 76 and 77 and enhanced penalty imposed under section 73.
On application:
The Assistant Commissioner had given detailed findings for not levying
penalty under sections 76 and 77. However he had imposed penalty under section
78. For imposing lesser penalty of Rs. 6,000 under section 78 he had exercised
his discretion as available under section 80. He did not propose to impose
penalty under section 76 and 77 on the ground that the assesses did not have
any mala fide intention to evade tax,
as seen from the payments made by them, abiding by the departmental
regulations. He had noted that that payment of tax diluted the offence
committed by them. It was now well settled that penalty is not leviable on mere
venial breach. There has to be intention to evade payment of duty, facts of
suppression, mala fide, etc. for levy
of penalty. The Assistant Commissioner noticed that there was no such intention
to evade tax and the short levy had, been paid immediately with interest. He
had used his discretion to levy less penalty under section 80. Sections 76 and
77 grants for imposition of penalty where there is intention to evade service
tax with facts of suppression, mala fide
intention, etc. These elements had not been found by the Assistant
Commissioner. The findings of the Assistant Commissioner to drop the levy of
penalties under section 76 and 77 and to levy lesser penalty under section 78
in view of the powers conferred under section 80, prima facie appeared to be just and proper. Therefore, waiver of
pre-deposit of penalties imposed and enhanced in the impugned orders was to be
granted. [