TaxTMI 
TaxTMI 
2007 (10) TMI 28
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....lso. In the present appeal, they concede tax and interest liabilities. Their only grievance is against the penalties. 2. After hearing both sides and considering their submissions, I note that the company had instituted proceedings before the Board for Industrial and Financial Reconstruction (BIFR, for short) under the Sick Industrial Companies (Special provisions) Act, 1985 (SICA for short) in the year 2001 and that the Board declared them sick under Section 3 (l)(o) of the said Act as on 31-12-2000 as per order dated 19-9-2002, a copy of which is available on record. Learned counsel argues that the factum of the company having been declared sick as on a date prior to the period of dispute is a 'reasonable cause' under Section 80 ....
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....g careful consideration to the submissions, I note that the question whether the assessee having been declared a sick industry by BIFR should be exonerated from penal liability was not before the Tribunal in the case of Sree Vadivambigai Textile Mills (supra). In that case, the question was whether the Revenue should be lenient towards such an industry in demanding interest on service tax under Section 75 of the Finance Act, 1994. Neither of these questions arose in the case of InmaInternationalSecurityAcademy (Supra), wherein Section 77 penalty was sustained and Section 76 penalty was reduced. The case law cited by teamed DR does not appear to advance the Revenue's case. 4. The unique question arising for consideration in the present ....
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....ot imposing penalty of Rs.1,000/- under Section 77 of the Finance Act on the appellants for their failure to file service tax return is ruled out. 5. However, payment of service tax requires money. It is on record that the appellant-company was declared sick with effect from 31-12-2000 by BIER and that the relevant rehabilitation scheme is under execution. Apparently, during the period of dispute, the company was 'sick' in terms of Section 3(1)(o) of SICA. The service tax payments during the period happened to be delayed on account of this precarious condition of the company. In the context of addressing the question whether the appellants should be exonerated under Section 80 from their penal liability under Section 76, it is nece....