2008 (7) TMI 305 - AT - Service Tax

Revenue's Appeal Dismissed in Tax Revision Case: Fair Consideration Emphasized

The appeal was filed by the Revenue against a revised order passed by the Commissioner of Central Excise, where the Show Cause Notice for the revision of ... SCN was issued proposing revision of the Adjudication order for enhancement of penalty as imposed by Adjudicating Authority – Revision order not enhanced penalty on ground that respondent a proprietorship concern, on its own discharged the tax liability and paid the tax before issue of SCN and intimated the same to the Department through the impugned ST-3 returns – findings of Commissioner are correct – revenue appeal is rejected Issues:Appeal against revised order passed by Commissioner of Central Excise dropping Show Cause Notice for revision of Adjudication order.Analysis:The appeal was filed by the Revenue against a revised order passed by the Commissioner of Central Excise, where the Show Cause Notice issued for the revision of the Adjudication order was dropped. The Respondent, a proprietorship concern, had paid the tax before the issue of the show cause notice. The Adjudicating Authority imposed a penalty of Rs. 1,000 each under Section 76 and 77 of the Finance Act 1994. A show cause notice was issued proposing the revision of the Adjudication order, which was subsequently dropped by the Commissioner. The Commissioner noted that the assessee, a small proprietary concern, was registered in 2003 and had voluntarily discharged the tax liability of Rs. 18,162 and informed the Department through the ST-3 returns. The earlier Show Cause Notice was for charging interest under Section 75 of the Act and not for the impugned Service tax. The Deputy Commissioner had imposed penalties for lapses under Sections 76 and 77 of the Act. After detailed consideration of the facts and circumstances, the Commissioner decided to drop the proceedings, a decision that was upheld in the appeal. The Tribunal agreed with the finding of the Commissioner, and the appeal filed by the Revenue was rejected.This judgment highlights the importance of considering the specific circumstances of a case, especially regarding tax liabilities and penalties, before making a decision on the revision of an Adjudication order. It emphasizes the significance of voluntary compliance by the assessee and the rationale behind the dropping of proceedings by the Commissioner after a thorough review of the case. The decision underscores the need for a fair and just approach in tax matters, taking into account all relevant factors before reaching a conclusion.