2011 (3) TMI 1262 - AT - Service Tax

Penalty - Delay in submission of return - first appellate order granting relief to the assessee - Held that - When the reasoning is not supported by any evidence order is said to be unreasoned and perverse - Revenue s appeal is allowed by restoring the Order-in-Original.

Summary

Issues:
- Appeal against relief granted to respondent regarding penalties under Sections 76 and 77 of the Finance Act, 1994.

Analysis:
The Revenue appealed against the first appellate order that granted relief to the respondent in relation to penalties imposed under Sections 76 and 77 of the Finance Act, 1994. The Revenue argued that the taxes collected by the respondent were not paid to the government account, making the respondent liable for penalties. The Revenue contended that even if the Chartered Accountant was at fault, the respondent should still be held accountable for the penalties under the Rules.

Upon reviewing the reasoning of the adjudicating authority, it was noted that the delay in payment of service tax was attributed to the Chartered Accountant employed by the respondent. The adjudicating authority found that there was no deliberate attempt by the respondent to delay the payment, leading to the decision to set aside the penalty imposed under Section 76. However, the penalty of Rs. 1,000 under Section 77 was upheld due to the delay in submission of returns beyond a certain period.

The appellate tribunal disagreed with the conclusion of the first appellate authority, stating that there was no evidence to support the claim that the Consultant for the respondent was solely responsible for the alleged offense. The tribunal found the reasoning of the first appellate authority to be unreasoned and perverse, leading to the decision to allow the Revenue's appeal by restoring the Order-in-Original. The tribunal emphasized the lack of evidence supporting the immunity granted to the respondent and overturned the decision regarding the penalties imposed.

In conclusion, the appellate tribunal sided with the Revenue by setting aside the relief granted to the respondent and upholding the penalties imposed under Section 77, emphasizing the lack of evidence supporting the immunity granted based on the actions of the Chartered Accountant.