ORDER
M.P. Bohra, Member (J)
1. Heard Shri S.K. Bhutra, Consultant for Appellant and Shri K. Sanyal, JDR for Respondent. Mr. Bhutra submits that the entire amount of Service Tax was paid before the order of Adjudication was passed. It was thus not proper on the part of Original Authority to levy the interest and impose penalty equal to the amount of tax . He submits that the delayed payment of tax was due to crash of hard disk of their office computer and the loss of shares involving huge amount in transit in the month of May, 1999. Therefore, he submits that the interest and penalty is not imposable. He relies on the decisions on :-
Inma International Security Academy Pvt. Ltd. v. CCE, Chennai reported in 2005 (180) E.L.T. 107 (Tri.-Chennai) and
CCE, Mumbai v. Top Detective & Security Services Pvt. Ltd. reported in 2005 (180) E.L.T. 363 (T) : (2005) 1 STJ 403 (CESTAT-Mumbai)
Therefore, he submits that the appeal may be allowed.
2. Learned SDR submits that the appellants have failed to deposit the Service Tax within time and that’s why they are liable to pay interest and penalties under the rules. Therefore, he submits that the appeal may be dismissed.
3. I have perused the impugned order and the case record and heard the rival contention raised by both the sides. It is true that the delay was caused in filing the return and in depositing the service tax due to some unavoidable reasons which were beyond the control of appellant. The shares involving huge amount was lost in transit in the month of May, 1999 and the entire data was lost due to crash of Hard Disc of their office computer in August, 1999. It is a fit case where the maximum penalty ought not to have been awarded. The entire Service Tax demand has been paid by the appellant. This payment has been made prior to passing of the order in original. The same finding has been arrived at by Commissioner of Appeal. The appellant was required to pay interest as they failed to deposit the Service Tax within time. It does not call for any interference. Taking into account the fact that the entire amount of tax was paid before the Adjudication of the case and the interest has also been deposited and no evidence has been brought on the record to indicate that the appellant had intention to evade the payment of tax, I am of the view that the maximum penalty equal to tax imposed by the lower authority is neither appropriate nor reasonable. I reduce it to Rs. 10,000.00. As regards the penalty of Rs. 5,000.00 under Section 77 for delayed filing of return is not called for any interference.
4. In the result, the impugned order is modified in above terms and appeal is disposed off accordingly.