2010 (11) TMI 595

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....;     Whether the penalty under Section 78 of the Finance Act, 1994 can be reduced below the minimum limit prescribed by invoking Section 80 of the Finance Act, 1994? (ii)    Whether the Tribunal was entitled to come to a conclusion regarding the unawareness regarding tax liability/bona fide on the face of the fact that they had collected Service Tax, with a finding of fact on this behalf? 2. M/s. Target Polymers Pvt. Ltd., 6, Patel Colony, R.K. Colony, Jamnagar is holding service tax registration under the category of "Business Auxiliary Service." 3. During the scrutiny of the records of the respondent, it was observed that the respondent had received an amount of Rs. 41,05,929/- (inclu....

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....in terms of the said provision. That there was no discretion vested in the authority to impose a lesser penalty than that provided under the said provision. That as such, the Commissioner (Appeals) was not justified in reducing the penalty imposed under Section 78 of the Act and that the Tribunal was not justified in confirming the same. In support of his submissions, the learned counsel placed reliance upon a decision of this Court in the case of Commissioner, Central Excise and Customs v. Port Officer [2010 (19) S.T.R. 641 (Guj.) = 2010 (257) E.L.T. 37 (Guj.)] rendered on 8th July, 2010 in Tax Appeal No. 1367 of 2009 to submit that the controversy in issue stands concluded by the said decision in favour of the revenue. 6. Despite ....

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.... reduced quantum of penalty is imposable. The provision only says that no penalty is imposable. It was further held that on a conjoint reading of Section 76 and Section 80 of the Finance Act, 1994, it is not possible to envisage a discretion as being vested in the authority to levy penalty below the prescribed limit. If the authority imposing the penalty is not entitled to levy below the minimum prescribed, the appellate Court and the Tribunal cannot read the provision so as being vested with such powers, namely, to reduce the penalty below the minimum prescribed. The Court accordingly answered the question in the negative. 8. The aforesaid decision would be squarely applicable to the facts of the present case wherein the Commission....