2015 (1) TMI 1145 - AT - Service Tax

Imposition of penalty u/s 76 - Delay in payment of service tax - Held that - There is delay involving 41 days, 10 days, 61 days and 31 days. Delays have continued over many months. Commissioner (Appeals) has rightly analysed a matter and upheld the imposition of penalty by the Adjudicating Authority - There are continuous delays. These cannot be said bonafide. I have also perused Tribunal's judgement in the case of same appellant. Delays were also referred. Such delayed cannot be continued and ignored. Penal action was rightly confirmed by adjudicating authority and approved by Commissioner (Appeals). As such, I do not find any force in the submission made by the appellant. I agree with the findings recorded by Commissioner (Appeals). - Decided against assessee.

Summary

Issues involved: Charging of interest and imposition of penalty under Section 76 of the Finance Act 1944 and Rule 15(3) of the Cenvat Credit Rules 2004 for delay in payment of service tax.

Analysis:

1. Background: The appellant, engaged in Cargo Handling Services, failed to pay service tax for the months of April to September 2005 on time, leading to interest and penalties being imposed.

2. Legal Provisions: The case involved contravention of Section 68 of the Finance Act, 1994, read with Section 66 and Rules 6(1) & (2) of the Service Tax Rules, 1994, regarding timely payment of service tax to the Central Government.

3. Adjudication: The Adjudicating Authority confirmed the demand of interest amounting to Rs. 357 and imposed penalties under various sections, including Rs. 14,600 under Section 76 for delay in payment of service tax and Rs. 2,000 under Rule 15(B) of the Cenvat Credit Rules 2004.

4. Appellant's Argument: The appellant's counsel argued that the delay was unintentional, citing a similar case where a penalty was dropped due to the appellant being a new entrant facing operational challenges.

5. Revenue's Position: The Revenue contended that the delays were significant and continuous, justifying the imposition of penalties for non-compliance with service tax payment deadlines.

6. Commissioner's Decision: The Commissioner (Appeals) upheld the imposition of penalties, citing the appellant's admission of delays in payment and the continuous nature of the violations over several months.

7. Judicial Analysis: The presiding judge reviewed the case records, emphasizing the continuous nature of the delays and the lack of justification for the appellant's actions, agreeing with the Commissioner's decision to confirm the penalties.

8. Final Decision: The judge rejected the appellant's appeal, emphasizing that the continuous delays were not bona fide and that penalties were rightly imposed, concluding that no grounds existed for waiving the penalties.

9. Conclusion: The judgment affirmed the imposition of penalties for the delayed payment of service tax, highlighting the importance of compliance with tax payment deadlines and rejecting the appellant's appeal for penalty waiver.

This detailed analysis covers the legal judgment's key aspects, including the background, legal provisions, arguments presented, the decision-making process, and the final outcome.