ORDER
P.G. Chacko, Member (J)
1. This appeal filed by the assessee is against a penalty imposed on them by the Commissioner (Appeals) under Section 76 of the Finance Act, 1994. The appellants had defaulted payment of service tax for the period August, 2003 to April, 2004. This tax was, however, paid by them in three installments during June to August, 2004. A show-cause notice was issued by the department in October, 2004 for levy of interest on the service tax amount and for imposition of penalties under various provisions including Section 76 ibid. According to the impugned order, there are penalties of Rs. 500/- and Rs. 1,000/- on the assessee under Sections 75A and 77 of the Finance Act, 1994, but these are not under challenge. However, the penalty of Rs. 100/- per day imposed on them under Section 76 of the Act is under serious challenge. It is submitted by the learned Counsel for the appellant that they had fallen into a financial crisis on account of criminal breach of trust committed by their sub-agents. Contextually, it is pointed out that criminal proceedings were taken against those people and the same are going on. It is submitted by the learned Counsel that the benefit of Section 80 of the Act should have been granted to the assessee in the above circumstances. In this connection, reliance is also placed on the following decisions of the Tribunal:
(i) Akbar Travels of India (P) Ltd. v. Commissioner of Customs and Central Excise, Cochin 2008 (11) S.T.R 42 (Tri.-Bang.).
(ii) R. Sukumar v. Commissioner of Central Excise, Trichy 2008 (11) S.T.R 118 (Tri.-Chennai).
I have heard the learned SDR also, who has reiterated the findings of the Commissioner (Appeals).
2. After giving careful consideration to the submissions, I find that the appellants have sought exoneration from penal liability under Section 76 on the ground that they had paid the entire amount of service tax voluntarily before the show-cause notice was issued. They have not claimed the benefit of Section 80 of the Act in this appeal, though this benefit is being prayed for by counsel. In the case of Akbar Travels of India (supra), a major portion of the service tax was paid before the issue of show-cause notice and the balance amount before the passing of the Order-in-Original and, in the circumstances, the benefit of Section 80 of the Act was given to the assessee. In the present case, admittedly, the entire amount of service tax was paid before the issue of the show-cause notice and the assessee is willing to pay interest thereon far the period of delay at the applicable rate. Apparently, they have not paid such interest for want of quantification. In the case of R. Sukumar (supra), service tax along with interest was paid before issuance of show-cause notice and relief under Section 80 was granted in the absence of finding of dishonest conduct by the assessee. The decision in Akbar Travels of India case by a Division Bench of this Tribunal, which granted the benefit of Section 80 of the Finance Act, 1994 to the assessee and set aside a penalty imposed under Section 78 of the Act, after noting that a major part of the service tax had been paid before issue of show-cause notice and the balance amount before adjudication, operates in favour of the appellants. Indisputably, a penalty under Section 78 is harsher than one under Section 76 inasmuch as the former is attracted by graver offences like fraud, collusion etc. when compared to the latter which provides for penalty for simple default of payment of service tax. Even the graver penalty was set aside by this Tribunal under Section 80 of the Finance Act, 1994 on the ground that a major amount of service tax was paid before issue of show-cause notice and the balance amount before adjudication. In the instant case, the assessee craves for the benefit of Section 80 against the lesser penalty imposed on them under Section 76, and that too on the ground that the entire amount of service tax was paid prior to the issue of the show-cause notice. I am of the view that the Revenue cannot legitimately resist this relief inasmuch as they have not appealed against Akbar Travels of India (supra).
3. In the result, the penalty imposed on the appellants under Section 76 of the Act gets vacated and this appeal is allowed.
(Dictated and pronounced in open court)