2006 (6) TMI 49 - AT - Service Tax

Tribunal upholds appeal for Sept.'02 penalty but confirms June'02 penalty due to lack of cause

The Tribunal partially allowed the appeal, upholding the non-imposition of penalty for the quarter ending Sept.'02 due to valid reasons provided by the ... Service Tax – Clearing and forwarding agent – Penalty u/s 80 of Finance Act, 1994 waived as appellant had given detailed reason in respect of delay in payment of service tax and return because of peak season due to deepawali and other festivals – Penalty u/s 76 ibid upheld as appellant had not given any substantial cause for delay Issues:Imposition of penalty under Section 76 for two quarters - June'02 and Sept.'02.Analysis:The appeal was directed against a review order passed by the Commissioner (Service Tax) regarding the imposition of penalties under Section 76 of the Finance Act, 1994. The appellant, a C&F Agent of Asian Paints, had defaulted in paying the Service Tax and filed returns belatedly for two quarters. For the quarter ending Sept.'02, the appellant provided detailed reasons for the delay, attributing it to the peak season during Deepawali and other festivals. The adjudicating authority had waived the penalty for this quarter under Section 80. The Tribunal found the reasons provided by the appellant to be justifiable, considering the festive season as a valid cause for the delay. Thus, the appeal for non-imposition of penalty for the quarter ending Sept.'02 was upheld.However, for the quarter ending June'02, the appellant failed to provide any substantial cause to set aside the penalty imposed under Section 76. The review order by the Commissioner was clear on this point, and the Tribunal found no reason to interfere with the penalty imposed for this quarter. Therefore, the penalty for the quarter ending June'02 was upheld.In conclusion, the Tribunal allowed the appeal partly, upholding the non-imposition of penalty for the quarter ending Sept.'02 but confirming the penalty imposed for the quarter ending June'02. The decision was made based on the specific circumstances and justifications presented by the appellant for each quarter, leading to a partial success in the appeal.