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of <h1>Appellate Tribunal Upholds Equal Penalty for Service Tax Violation</h1> <h3>M/s. Asad Cable Network Versus Commr. of Central Excise & Service Tax, Meerut-II</h3> M/s. Asad Cable Network Versus Commr. of Central Excise & Service Tax, Meerut-II - TMI Issues:1. Reduction of penalty under section 78 of Finance Act, 1994.Analysis:The judgment by the Appellate Tribunal CESTAT ALLAHABAD, delivered by Member (Technical), addressed the issue of whether an equal penalty imposed under section 78 of the Finance Act, 1994, can be reduced to 25% when the penalty was not deposited within one month from the date of passing the original order. The case involved a cable operator service provider who was issued a show cause notice for Service Tax amounting to Rs. 4,97,244 for the period from 2007-08 to 2011-12. The original authority confirmed the amount and imposed an equal penalty under section 78. The appellant, not contesting the Service Tax and interest, sought the option of paying a reduced penalty. However, the Commissioner (Appeals) did not interfere with the original order, leading the appellant to appeal before the Tribunal.The Tribunal referred to a judgment by the Hon'ble Allahabad High Court in the case of K.A. Forward Shoes Factory v. Assistant Commissioner of Central Excise, where it was held that failure to deposit 25% of the penalty amount within 30 days of the order disentitles the appellant from the benefit of reduced penalty under the relevant provisions. Drawing a parallel between the provisions of section 11AC of the Central Excise Act, 1944, and section 78 of the Finance Act, 1994, the Tribunal dismissed the appeal based on the High Court's ruling. The Tribunal emphasized that the provisions of the two Acts are similar, and therefore, the appellant was not entitled to a reduced penalty due to non-compliance with the deposit requirement within the specified timeframe.In conclusion, the judgment clarified that the failure to deposit 25% of the penalty amount within the stipulated period precludes the appellant from availing the benefit of reduced penalty under the relevant provisions. The decision was based on the interpretation of the law as per the ruling of the Hon'ble Allahabad High Court, highlighting the importance of timely compliance with penalty payment requirements to qualify for any reduction.
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