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TAXAP/825/2010 4/ 4 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 825 of 2010
=========================================
COMMISSIONER,
CENTRAL EXCISE & CUSTOMS - Appellant(s)
Versus
M/S
S J METHA & CO - Opponent(s)
=========================================
Appearance :
MR
DARSHAN M PARIKH for
Appellant(s) : 1,
RULE SERVED for Opponent(s) :
1,
=========================================
CORAM
:
HONOURABLE
MR.JUSTICE K.A.PUJ
and
HONOURABLE
MS.JUSTICE HARSHA DEVANI
Date
: 27/10/2010
ORAL
ORDER
(Per
: HONOURABLE MR.JUSTICE K.A.PUJ)
The
appellant-revenue has filed this tax appeal under section 35G of the
Central Excise Act, 1944, proposing to formulate the following
substantial questions of law for determination and consideration by
this Court:
Whether
the penalty under Section 76 of the Finance Act, 1994 can be reduced
below the minimum limit prescribed?
Whether
the penalty under Section 76 of the Finance Act, 1994 can be dropped
without invoking section 80 of the Finance Act, 1994?
Whether
the Tribunal in, law 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?
Heard
Mr.Darshan Parikh, learned Senior Standing Counsel appearing for the
appellant-revenue. Despite service of notice, nobody appears on
behalf of the respondent.
The
brief facts of case are that the respondent is
engaged in providing services under the category of “Business
Auxiliary Service” and is holding service tax
registration No. JMN/BAS-154/05-06. The
respondent had paid the due service tax along with interest for the
period from April-2006 to June-2006 and July-06 to Aug-06 i.e., late
by 268 days and 176 days respectively and the ST-3 return for the
period April-06 to Sept-06 was also filed late by 180 days.
Due
to the above lapses, a show cause notice dated 15.04.2008 was
issued to the respondent proposing to impose penalty for late
payment of service tax under section 76 of the Finance Act, 1994 and
penalty for late filing of ST-3 returns under section 77 of the
Finance Act, 1994 (herein after referred as the “Act”).
The
above Show Cause Notice was adjudicated by the Adjudicating
Authority vide Order-in-Original No.
202/Service Tax/2008 dated 28.11.2008. The Adjudicating Authority
vide the said Order-in-Original had imposed (1) penalty of Rs.
88,800/- under section 76 of the Finance Act, 1994 for late payment
of service tax and (2) penalty of Rs 1,000/- under section 77 of
the Finance Act, 1994 for late filing of ST-3 returns.
Being
aggrieved by the aforesaid order of the Adjudicating Authority, the
respondent filed appeal before the Commissioner (Appeals), Central
Excise, Rajkot. The Commissioner
(Appeals), Central Excise, Rajkot, by passing Order-in-
Appeal No. 407(353-RAJ)/2009/COMMR(A)/RAJ dated 11.05.2009, reduced
the penalty of Rs. 88,800/- imposed under Section 76 of Finance Act,
1994 to Rs. 25,000/- by invoking Section 80 of the Finance Act,
1994.
Being
aggrieved, the appellant filed appeal before the Tribunal against
above Order-in-Appeal passed by the Commissioner (Appeals), Central
Excise, Rajkot to the extent of reducing the penalty under Section
76 of the said Act.
The
Tribunal by the impugned order has rejected the appeal filed by the
appellant.
The
issue involved in the present tax appeal is similar to one which is
involved in Tax Appeal No.1367 of 2009. While deciding the said tax
appeal on 8.7.2010, this Court has quashed and set aside the order
passed by the Tribunal and restored the matter to the file of the
Tribunal to decide the same afresh in accordance with law.
This
Court in the Tax Appeal No.1367 of 2009 has taken the view that on a
conjoint reading of sections 76 and 80 of the Act, it is not
possible to envisage a discretion as being vested in the authority
to levy a penalty below the minimum prescribed limit. If the
authority imposing the penalty is not entitled to levy below the
minimum prescribed, the appellate authority and the Tribunal cannot
read the provision so as being vested with such powers, namely, to
reduce the penalty below the minimum prescribed. This Court has,
therefore, answered the question accordingly in the negative and the
said tax appeal was disposed of.
Following
the aforesaid decision of this Court, we hereby quash and set aside
the impugned order of the Tribunal and restore the matter to the
file of the Tribunal to decide the issue afresh in light of the
observations made by this Court in the order dated 8.7.2010 in Tax
Appeal No.1367 of 2009, as indicated hereinabove in the present
order.
This
tax appeal is, accordingly, disposed of.
[K.A.PUJ,
J.]
[HARSHA
DEVANI, J.]
parmar*
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