TaxTMI 
TaxTMI 
2010 (1) TMI 606
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....ds the service tax liability and the interest therein. Vide the said Order-in-Original dated 8-5-2007, the adjudicating authority dropped the penalties proposed in the show-cause notice under sections 76, 78 while imposing penalty under section 77. The appellant is not challenging the penalty imposed under section 77. Ld. Commissioner as revisionary authority and as per the provisions of section 84 of the Finance Act, 1994, revised the order of the adjudicating authority and issued a show-cause notice dated 21-2-2002 to the appellant directing him to show-cause notice as to why penalties need not be imposed on him under sections 76, 78 of the Finance Act, 1994. Appellant agitated the same before ld. Commissioner. The ld. Commissioner vide i....
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....e services provided by him during the relevant period. On the other hand I find in the show-cause notice that when the preventive unit visited the office of the appellant, who recorded the statement of the appellant under section 14 of the Central Excise Act, wherein the appellant had very clearly stated that "he was not aware that the services of handling, rendered by him are taxable under Service Tax; that on receipt of the summons he realized that the services are taxable under Service Tax; that he has got registered with the department; that he commit to pay the service tax for the period from 16-8-2002 to 31-3-2006 along with interest and produce the details of payment of service tax by 15-6-2006". It is also noted that in the show-cau....
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.... of Rs. 6,68,945, whereas the penalty imposed by the Revisionary Authority is Rs. 10,00,000. It is very clear that imposition of such a huge penalty on an assessee who voluntarily complies is uncalled for and very much goes against the spirit of the various provisions of the Finance Act, 1994 relating to service tax which we have earlier quoted. In our view, the Revisionary Authority has exercised his powers for the reason that legally, he has the powers. Such power has been exercised ignoring the various provisions already existing in the Finance Act. Even in cases of suppression, if an assessee pays the tax along with interest and 25 per cent penalty, the proceedings are closed. Therefore, what is the justification for imposing a penalty ....
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....thorities that it is their duty to follow the law of the land sincerely and need not follow the duty evasion/avoidance/deferment modus operandies of this type." This is a classic instance to show how an Officer entrusted with a quasi-judicial function can become crazy and cause untold miseries in blatant violation of law with no regards for the rule of law. According to us if such an Officer is entrusted with quasi-judicial duties, he will resort to arbitrary exercise of power, which will compel the victims to approach higher Tribunals for extricating them from the illegal orders. The predicament of such an Officer is quite evident from the fate of the appellant before us. This case on hand is a classic example of the vagaries of a Gover....
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.... penalty of Rs. 59,000. He has totally ignored the fact that the tax amount along with the interest was paid before the issue of show-cause notice. The Revisionary Authority should keep in mind that the penalty imposed should be commensurate with the offence. Majority of the cases from Serial Nos. 1 to 14 relate to the commission received by the Automobile dealers from financial institutions. There was doubt in the trade circles whether the commission received should be taxable under the category of "Business Auxiliary Service". When there is genuine doubt and the Board issued a clarification, no mala fide can be attributed. In such cases, waiver of penalty under section 80 is justified." 7. It is also to be noted that the Hon'ble High C....