CESTAT, KOLKATA BENCH

Commissioner of Service Tax

v.

Indo Foreign (Agents) (P.) Ltd.

DR. CHITTARANJAN SATAPATHY, TECHNICAL MEMBER

ST APPEAL NO. 16 of 2005

ORDER NO. A-453 (KOL.) OF 2007

March 29, 2007

Section 76 of Finance Act, 1994 - Penalty for failure to pay service tax - Adjudicating authority had Imposed penalty under section 76 on assessee-custom house agent - On appeal, Commissioner (Appeals) on finding that, service tax was paid by assessee before issue of show cause notice, set aside above penalty - However from order of adjudicating authority it was found that there were 70 instances where assessee had delayed in payment of service tax and in maney cases delay was more than one year to four years - Further, in case of CCE v. Parmarth Steel & Alloys (P) Ltd. 2007 (209) ELT 200 (Trib - Delhi) had held that penalty was imposable when duty was deposited before issue of show cause notice but after detection of mischief - Whether following ratio of above decision and considering facts in instant case, it was a fit case for imposition of penalty under section 76 - Held, yes - Whether therefore impugned order in appeal was to be set aside - Held, yes (Para 4)

FACTS

The penalty imposed by the original authority under section 76 upon the assessee-respondent was set aside by the Commissioner (Appeals) on the ground that the service tax was paid by it prior to issue of show cause notice.

On appeal

HELD

The assessee was licensed as Customs House Agent. Being Customs House Agent, it could not plead ignorance regarding the legal provisions and the requirements to pay Service Tax in time. The order of the adjudicating authority cited as many as 70 instances of delayed payment of Service Tax and in many cases, the delay was more than one year to four years. The Tribunal in the case of CCE v. Parmarth Steel & Alloys (P) Ltd. 2007 (209) E. L. T. 200 (Delhi - Trib) the held that the penalty was imposable when duty was deposited before issue of show-cause notice but after detection of mischief. Following the ratio of the said decision and considering the facts in the instant case, it was a fit case for imposition of penalty under section 76.

Hence, the impugned order-in-appeal was to be set aside and the impugned order-in-original in regard to imposition of penalty under section 76 was to be restored. [Para 4]

The appeal of the revenue was to be allowed. [Para 5]