ORDER
Archana Wadhwa, Member (J)
1. As per facts on record, the appellant is engaged in man power recruitment service and erection, commissioning and installation service and was required to pay service tax on the same. Their premises were visited by anti evasion squad on 03/12/2004 and scrutiny of their records revealed that the appellants have failed to pay tax on the above services. Accordingly, proceedings were initiated against them for confirmation of demand of service tax and for imposition of penalty. The Deputy Commissioner vide his impugned order confirmed the demand along with interest (which already stands paid by the appellants even before the issuance of the show cause notice) and imposed penalty of Rs. 61,600/-under Section 76 of the Finance Act and of Rs. 4,32,851/- under Section 78 of the said Act. The appellants filed an appeal there against before the Commissioner (Appeals) praying for reduction in quantum of penalties on the ground that they were not aware of levy of service tax during the period in question; that their Managing Director had heart attack and was not attending the office work: that they have not collected the service tax amount from their customers. They also submitted that they had deposited the entire amount of tax along with interest even before the issuance of the show cause notice and, as such, imposition of penalties to the extent of 100% was neither justified nor warranted. The said appeal was rejected by the Commissioner (Appeals). Hence, the present appeal.
2. After hearing both sides, I find that the appellant is not contesting the confirmation of service tax or interest. In fact the same stands paid by them even before the issuance of the show cause notice. The tax liability being new, there is a scope of appellants having entertained a doubt about the service tax being rendered by them being liable to tax. As such, taking into overall facts and circumstances of the case, I reduce the personal penalty of Rs. 4,32,851/- imposed under Section 78 to 25% of the same i.e. Rs. 1,08,213/-, which already stands paid by the appellants. Penalty under Section 76 is reduced from Rs. 61,600/- to Rs. 25,000/-. But for the above modification in the quantum of penalty, the appeal is otherwise rejected.
(Pronounced in Court on 2/2/07)