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2006 (11) TMI 492 - CESTAT, KOLKATAImposition of Penalty - delay for payment of Service Tax - Notice Sent by speed post - Tour Operator Service - exigible to tax - HELD THAT:- Penalty is a preventive as well as deterrent measure to defeat recurrence of breach of law and also to discourage non-compliance to the law of any wilful breach. Penalty prescribed by Section 76 is levy on service tax on the consideration received in relation to Tour Operator Service which came into force from 1997 and well known to tour operators. The decisions on which the Ld. Commissioner (Appeals) relied upon relates to the matter of Central Excise and mere payment of service tax before issue of show cause notice does not alter commission of breach of law on the date of commissioning of the offence. Casual plea of the assessee that they spent substantial money on advertisement and other expenses to attract travel loving people does not appear to be reasonable cause to exonerate from penalty. Of course, just because penalty is prescribed that should not mechanically be levied following Apex Court’s decision in the case of Hindustan Steel Ltd. v. State of Orissa [1969 (8) TMI 31 - SUPREME COURT]. Section 80 of the Act having made provision for excuse from levy of penalty under section 76 if the assessee proves that there was a reasonable cause for failure under that section no other criteria is mandate of Law to exonerate from penalty. No reasonable cause being patent from the record towards failure to deposit the tax due, duly, except the casual approach of aforesaid, the ld. Commissioner (Appeals) was not justified to set aside the penalty levied u/s 76 of the Act. Thus, to meet the end of justice, the learned Adjudicating Officer would do well to determine assessable value of service u/s 67 of the Act and determine tax liability afresh as well as impose penalty @ Rs. 100/- each for everyday of default on the defaulted amount or @ 2 per cent of tax due per month whichever is higher as per law as in for on the day of default. In the result order of learned Commissioner of Central Excise (Appeals) waiving penalty u/s 76 of the Act is set aside. The Respondent gets relief to the extinct (sic) (extent) indicated aforesaid and appeal of Revenue allowed in the manner decided as aforesaid.
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