TMI Blog2010 (7) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly answered in the negative. - 1367 of 2009 - - - Dated:- 8-7-2010 - D.A. Mehta and H.N. Devani, JJ. REPRESENTED BY: Shri Darshan M. Parikh, for the Appellant. Shri S.N. Soparkar with Mrs. Swati Soparkar, for the Respondent. [Judgment per: D.A. Mehta, J. (Oral)]. - This appeal has been preferred by appellant-revenue challenging order dated 26.12.2008 made by Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad (the Tribunal) proposing following question of law: Whether the penalty under Section 76 of the Finance Act, 1994 can be reduced below the limit prescribed by the section? 2. On 06.05.2010, when the appeal came up for hearing, following order came to be made by the Court: 1. Heard the learned Standing Counsel for appellant revenue. 2. Learned counsel has invited attention to section 76 as it stood at the relevant time as well as section 80 of the Finance Act, 1994 to assail the impugned order of the Tribunal. 3. Notice for final disposal returnable on 24th June, 2010. 3. Pursuant to the said order in response to notice issued by the Court, the respondent-assessee has put in appearance through learned Senior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Courts in the country. Lastly, it was submitted that if the Court was of the opinion that the impugned order of Tribunal was a non-speaking order, the matter could be restored to file of the Tribunal, leaving it open to the assessee to plead applicability of Section 80 of the Act. 5. The facts which emerge from the orders placed on record indicate that originally the adjudicating authority confirmed demand to the tune of Rs.93,621/- towards short paid service tax and imposed penalty of Rs.20,000/- under Section 76 of the Act with penalty of Rs.95,000/- under Section 78 of the Act. When the matter was carried in appeal before Commissioner (Appeals) in the first round vide order dated 01.05.2007 Commissioner (Appeals) deleted the entire penalty under Section 76 of the Act on the footing that penalty had been levied also under Section 78 of the Act and thereafter reduced the penalty under Section 78 of the Act from Rs.95,000/- to Rs.94,000/-. The same was carried in appeal by respondent-assessee. Tribunal vide order dated 03.09.2007 allowed the appeal and remanded the matter back to the adjudicating authority. In the fresh round of proceedings the adjudicating authority once aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n behalf of the assessee that authority has discretion to impose lesser penalty under Section 80 of the Act. Thereafter the decisions have been enumerated by the Tribunal on which reliance has been placed on behalf of the assessee. In the entire order one does not find as to how and in what manner either Section 76 or Section 80 of the Act vests a discretion in the authority to levy penalty below the minimum prescribed. The last sentence, which appears in the order, indicates that the same is virtually an afterthought. After holding that the Tribunal rejects the appeal filed by the revenue it is observed I also find that benefit of Section 80 of Finance Act, 1994 has been appropriately extended to the respondents. The impugned order is thus not a reasoned order. Sections 76 and 80 of the Act as are relevant for the present (and as applicable at the relevant point of time), read as under: 76. Penalty for failure to collect or pay service tax. -- Any person, liable to pay service tax in accordance with the provisions of Sec. 68 or the rule made thereunder, who fails to pay such tax, shall pay, in addition to paying such tax, and interest on that tax in accordance with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssible to state that the provision does not further the object of the Statute or violates the legislative intent when read as it stands. Hence, Section 76 of the Act as it stands does not give any discretion to the authority to reduce the penalty below the minimum prescribed. 11. In so far as Section 80 of the Act is concerned, it overrides provisions of Sections 76, 77, 78 and 79 of the Act and provides that no penalty shall be imposable even if any one of the said provisions are attracted if the assessee proves that there was reasonable cause for failure stipulated by any of the said provisions. Whether a reasonable cause exists or not is primarily a question of fact. The provision indicates that the onus to establish reasonable cause is on the assessee. Once reasonable cause is established the authority has the discretion to hold that no penalty is imposable. The provision does not say that even upon establishment of reasonable cause a reduced quantum of penalty is imposable. The provision only says no penalty is imposable. If one reads the power in the provision as contended by the respondent it would mean that the provision is re-drafted by incorporating words which are not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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