20 - Interest and Penalty

No. In the case of Target Polymers Pvt. Ltd. [2010 (11) TMI 595 - GUJARAT HIGH COURT], it was 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. Following decision in the case of Port Officer [2010 (7) TMI 167 - GUJRAT HIGH COURT] ,the penalty under Section 78 of the Finance Act, 1994 cannot be reduced below the minimum prescribed by invoking Section 80 of the Finance Act, 1994.

Penalty minimums prohibited from reduction: statutory scheme prevents lowering prescribed service tax penalty through discretionary provisions. Penalty under section 78 of the Finance Act, 1994 cannot be reduced below the statutory minimum by invoking section 80; a conjoint reading of the provisions shows no discretion to levy or reduce a penalty below the prescribed floor, and appellate bodies and tribunals cannot read such power into the statutory scheme.