Order
Moheb Ali M., Member (T)
1. The stay application arose out of the order of the Commissioner (Appeals) who has rejected the appellants’ appeals before him and upheld the order of the lower authority.
2. The matter relates to delayed payment of Service Tax for the month of November 98 and December 98. The original authority demanded interest of Rs. 8,181/-. On the delayed payment and imposed a penalty of Rs. 2,32,253/- on the appellants under Section 76 of Chapter V of the Finance Act 1944 as imposed a further penalty of Rs. 8,000/- for each of the quarter/half yearly ST~3 Return filed by the appellants under Section 77 of Finance Act, 1994. The Commissioner (Appeals) rejected the appeal filed by the appellants.
3. The grounds for seeking waiver of pre-deposit and interest are that the authority bellowed laboured under the belief that penalty prescribed under Section 76 is the minimum that could be imposed. In fact the penalty is maximum presented. The lower authority went under the assumption that penalty is mandatory in spite of the fact that section so provides that penalty need not be imposed in each and every cases. There were exempting circumstances in their case as the company was in the process of clearing down. The original authority passed the order imposing penalty and demanding interest without giving an opportunity of being heard.
4. Heard both sides.
5. In the case of Commissioner of Central Excise, Jaipur the Tribunal held that penalty is subject to discretion and the amount of Rs. 100/- per day of delay is not the minimum penalty. A proper ground has to be made out for imposing maximum penalty. No such ground seemed to have been made out by the original authority nor by the Commissioner (Appeals) who upheld the order. The appellants have been paying Service Tax with interest from time to time.
6. The appellants have made out a prima facie case in their favour. Pre-deposit of penalty and interest waived during the pendency of appeal.