ORDER
C.N.B. Nair, Member (T)
1. Heard both sides and perused record.
2. The appeal is directed against imposition of penalty of Rs. 48,800 on the appellant under Section 76 of the Finance Act, 1994.
3. The facts leading to the imposition of penalty are that the appellant renders financial services which attract service tax. The tax amount is required to be paid on a monthly basis and returns filed on half yearly basis. The appellant was complying with this procedure.
4. A show cause notice was issued on October 8, 2004 pointing out that, from May 14, 2003, the appellant should have paid tax at the revised rate of eight per cent and not at the earlier rate of five per cent. The appellant’s explanation was that it was not aware of the revision in the rate and that is the reason for short payment. It was also pointed out that the appellant had been filing periodic returns, including for the month of July 2003, and if the error had been pointed out, payment would have been made forthwith. The appellant has also deposited the short-paid tax along with interest.
5. The submission of the learned Counsel for the appellant is that the short payment resulted from the appellant not being aware of the revision in the tax rate and no penalty is warranted in such cases. Reliance is also being placed on the decision of this Tribunal in the case of Ram Krishna Travels Pvt. Ltd. v. CCE, Vadodara as reported in [2007] 6 STR 37 (Tri.-Mumbai).
6. It is seen that Section 76 is in regard to failure to pay tax. In the present case, there was no failure as such, but there was short payment of tax for a bona fide reason. The short payment was also clear from the return filed by the appellant. No penalty is attracted in such cases, as held by the Tribunal in the aforesaid decision. Penalty is set aside and the appeal is allowed.