2019 (6) TMI 1245

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....um of penalty at 25% of service tax demand and extended to the respondent assessee the benefit of payment of 25% of mandatory equal amount of penalty under section 78 of the Finance Act, 1994, thereby directing the assessee to pay only 25% of the service tax demanded as penalty under section 78 of the Finance Act, 1994. 2. We have heard both the sides on the issue and have perused the proceedings of the case. The issue to be decided by us is "whether the Commission (Appeals) was right in giving the benefit of reduced penalty of 25% under Section 78 of the Finance Act, 1994 even when the penalty has not been deposited by the respondent assessee". 3. It will be appropriate to have a look at the penal provisions as provided under Section....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... of reduced penalty under the second proviso shall be available only if the amount of penalty so determined has also been paid within the period of thirty day referred to in that proviso: Provided also that in case of a service provider whose value of taxable services does not exceed sixty lakh rupees during any of the years covered by the notice or during the last proceeding, financial year, the period of thirty days shall be extended to ninety days. (2) Where the service tax determined to be payable is reduced or increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then for the purposes of this section, the service tax as reduced or increased, as the case may be, shall be tak....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....r be seen from a perusal of the provisions of section 78(1) that it provides for levy of equal amount of penalty where the provisions of section 73(2) have been invoked. However, the assessee can get the benefit of reduced penalty of 25% of the service tax determined, provided the assessee fulfills the following two conditions as per the proviso to Section 78(1) of the Finance Act, 1994, namely: (i) that the determined amount of service tax along with interest is paid within a period of one month from the date of issue of determining order. (ii) that the penalty imposed is equal to the amount of service tax confirmed, however, if the assessee deposits the 25% of penalty within a period of one month, the amount of 100% or equal amount ....