Penalty for delayed service tax payment upheld where no satisfactory explanation or prior departmental clarification was shown.

Penalty under Section 76 of the Finance Act, 1994 was sustained for delayed payment of service tax on architectural and consulting engineering services. The relevant tax liability had already come into force for the period in question, and the assessee failed to show any prior clarification sought from the department or any satisfactory explanation for the delay. Correspondence on procedural matters did not displace the statutory penalty, so the penalty was upheld and the appeal was rejected.

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Issues: Whether penalty under Section 76 of the Finance Act, 1994 was liable to be sustained for delayed payment of service tax on architectural and consulting engineering services.

Analysis: The service tax on the relevant services had already come into force, and the dispute related to the year 2000-2001. The appellant did not establish that any clarification had been sought from the department before registration, and no satisfactory explanation was given for the delay in payment of tax. The records also showed correspondence with the department on procedural matters, but not any basis to exclude the statutory penalty.

Conclusion: The penalty under Section 76 was upheld and the appeal was rejected.

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