Appellants' Late Filing Penalties Upheld for ST-3 Returns under Finance Act

The Tribunal upheld the confirmation of penalty/late fee imposed on appellants for late filing of ST-3 returns, citing violation of Section 68 (1) of the Finance Act, 1994. The appeal against penalties was dismissed, as the late filing attracted penalties under Rule 7 (c) due to delays ranging from 25 to 1016 days. The Commissioner (Appeals) decision was upheld, finding no rebuttal from the appellant, resulting in the dismissal of the appeal.

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Issues: Late filing of ST-3 returns, payment of service tax through Cenvat credit and book adjustment, violation of Section 68 (1) of the Finance Act, 1994, imposition of late fee, confirmation of penalty by Commissioner (Appeals).

The judgment pertains to an appeal against an order-in-appeal dated 30/01/2018 concerning the late filing of ST-3 returns by the appellants engaged in providing taxable services, including banking and financial services. The Department observed that service tax payments were made through Cenvat credit and book adjustment, leading to a show cause notice for recovery of dues under Section 68 (1) of the Finance Act, 1994 and Rule 6 (2) of Service Tax Rules, 1994. The original adjudication dropped the demand but confirmed penalties. The subsequent appeal partially allowed dropping a penalty but confirming a late fee. The appellant, aggrieved, approached the Tribunal.

The appellant did not appear, seeking exemption from presence during the final hearing. The Department's Authorized Representative argued that penalties were dropped, and the service tax demand via book adjustment was also waived. Late filing attracts penalties as per the Act's mandate, necessitating dismissal of the appeal.

The key issue for adjudication was whether the Department could levy a late fee for delayed ST-3 returns filing. Section 68 (1) of the Finance Act, 1994 mandates timely service tax payment, with Rule 6 (2) requiring depositing service tax with the designated bank. Non-compliance with filing deadlines, as per Rule 6, was evident from the record, ranging from 25 to 1016 days delay. Rule 7 (c) allows for a late fee in case of such delays, constituting a violation of Section 70 of the Finance Act. The Commissioner (Appeals) upheld the penalty/late fee under Rule 7 (c) read with Section 70, finding no rebuttal from the appellant.

Considering the legal provisions, the Tribunal upheld the confirmation of penalty/late fee, finding no infirmity in the impugned order. The appeal was dismissed accordingly.

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