TMI Blog2010 (1) TMI 606X X X X Extracts X X X X X X X X Extracts X X X X ..... id to be a cause which prevents a man of average intelligence and ordinary prudence acting under normal circumstances without negligence or inaction or want of bona fide. - ST/409 OF 2008 - 39 OF 2010 - Dated:- 8-1-2010 - M.V. RAVINDRAN, JJ. ORDER 1. This appeal is directed against the Order-in-Revision No. 5/2008(Revision), dated 16-6-2008. 2. Heard both sides and perused records. 3. The issue involved in this case is regarding revision of the Order-in-Original No. 19/2007(ST), dated 8-5-2007, vide which the Asstt. Commissioner of Central Excise has confirmed the demand of the service tax payable by the appellant and appropriated the amount to be paid by the appellant towards the service tax liability and the interest therei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt of Karnataka in the case of Krishna Pipes Industries which was set aside by the Hon ble Supreme Court. It is his submission that once the appellant has admitted the fact that he did not pay the service tax for the earlier period itself is an evident that suppression of fact with intention to evade payment of tax. It is his submission that once provisions of section 78 are invoked and the service tax liability has been accepted by the appellant he is liable to be penalized under sections 76, 78. 6. On perusal of the order-in-revision, I find that the ld. Commissioner in his entire order has not recorded any findings as regards how the appellant had suppressed the details of taxable services provided by him during the relevant period. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... good, the payment immediately after pointing out by the departmental officers has diluted the offence committed by them . Here is a case where the reason given for non-payment is ignorance. When it was told that they are liable for tax, the tax along with interest was paid. The very action of the appellant has shown that he is ready to comply with the law. Under such circumstances, the Original Authority is of the view that waiver of penalties under sections 76 and 77 can be given in terms of section 80 and also imposition of a nominal penalty under section 78. In our view, the order of the Original Authority is well reasoned and is not at all arbitrary. The tax paid is to the tune of Rs. 6,68,945, whereas the penalty imposed by the Revi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As per rule 209A of the Rules, the maximum penalty permissible is three times the value of such goods or five thousand rupees, whichever is greater. In the instant case the value of goods involved in the ten show-cause notices referred to above is Rs. 22.67 crores and so the maximum penalty that could be imposed on Shri Alvi in this case is Rs. 68 crores. I know that a person working in a Public Sector Undertaking cannot afford to pay a huge amount of penalty, even then I am compelled to impose here a greater amount of penalty so that the law of the land may not be faulted by anybody in such a blatant manner as has been done by Shri Z.U. Alvi and be it known to the concerned authorities that it is their duty to follow the law of the land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry powers by the Commissioner of Service Tax, Bangalore a penalty under section 78 has been enhanced to savage proportions. In the case of M/s. Sri Rama Enterprises, the service tax involved is Rs. 39,334, the Commissioner has enhanced the penalty under section 78 from Rs. 2,000 to Rs. 59,000. This is not at all justified. The logic of the Commissioner is that the Original Authority confirmed the demand because of suppression of facts. Therefore, severe penalty in terms of section 78 is warranted. He has recorded that the maximum penalty, which can be levied is twice the tax amount short paid which is Rs. 78,668. Holding such a view, he was merciful enough to impose only a penalty of Rs. 59,000. He has totally ignored the fact that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was reasonable cause for the said failure. The provision under section 78 of the Act is required to be acted upon in the absence of finding of fraud, collusion, wilful mis-statement, suppression of facts etc., as envisaged by section 78 of the Act. The order-in-original dated 15-6-2005 (A-1) does not record any finding of fraud, mis-statement etc., which could have been the basis for acquiring jurisdiction to impose the penalty. Accordingly, the Assessing Authority exercised the power under section 80 of the Act and decided not to impose any penalty under section 78. There was no basis for the Revisional Authority-cum-Commissioner to acquire the jurisdiction to impose penalty. There is no evidence produced before the revisional authority o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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