TMI Blog2004 (2) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... that the impugned order-in-appeal has been passed ex parte without granting an opportunity of hearing. He also states that penalty imposed under Section 76 only be imposed on a person who has not paid the tax but not on a person who has paid the tax after some delay. 2. In respect of Appeal No. ST/23/03, penalty of Rs. 500/- has been imposed under Section 75A of F.A. 94 for failure to take registration in addition to penalty of Rs. 27,194/- under Section 76 of F.A. 94 for failure to pay service tax and penalty of Rs. 1,000/- under Section 77 for failure to file the return. The appellants mainly challenge the penalty of Rs. 27,194/- which has been imposed on the basis of Rs. 100/- per day of delay limited to the amount of tax. Shri D.D. Gwalani, learned Advocate appearing for the appellant states that the lower authorities have taken the minimum penalty under Section 76 to be of Rs. 100/- per day whereas the statute provides a minimum penalty of Rs. 100/- only. He also cites the decision of the Tribunal in the case of C.C.E., Jaipur v. Milan Tent Palace -2001 (131) E.L.T. 274 to claim that since this is a new tax, no penalty should have been imposed. He also states tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x amount. 6. Heard both the learned DRs. They submit that the provision under Section 76 of the F.A. 94 should be interpreted to mean that the minimum penalty of Rs. 100/- for day of delay is imposable subject to the maximum of Rs. 200/- for day of delay but not exceeding the amount of service tax. They also state that in case Section 76 is interpreted to mean that the minimum penalty is Rs. 100/-, then also the orders passed by the lower authorities are justifiable since the amounts imposed are less than the maximum amounts prescribed under the law. The learned DRs also state that Section 76 provides for payment of penalty for delay in paying the service tax and therefore, the proposition that who has already paid the tax after some delay is not liable to penalty under the said section cannot be a valid interpretation of the law as it stands. 7. After hearing both sides and perusal of case records, I find that the penalties imposed in the above cases have been by and large calculated on the basis of Rs. 100/- per day of delay in paying the service tax subject to the maximum of the tax amount. It is apparent that the lower authorities are under the impression that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower authorities has no discretion in reducing the penalty. (7) Palika Palace v. C.C.E., Chandigarh - 2001 (134) E.L.T. 677 (Tri. - Del.) - In this order dated 29-8-2001, it was decided to reduce the penalty of Rs. 5,000/- holding that no penalty was imposable if the assessee proved reasonable cause for non-compliance under Section 80 of the F.A. 94. (8) Mohan Industrial Security Services v. C.C.E., New Delhi - 2002 (139) E.L.T. 722 (Tri. - Del.) - In this order dated 27-9-2001, penalty was reduced to Rs. 10,000/- holding that penalty is discretionary in view of Section 80 of the F.A. 94. (9) Smita Shetty Others v. C.C.E., Bangalore - 2003 (156) E.L.T. 84 = 2003 (57) RLT 543 (CEGAT - Ban.) - In this order dated 27-6-2003, it has been held that the minimum penalty under Section 76 of F.A. 94 is Rs. 100/- (contrary headnote in E.L.T. notwithstanding) and that the adjudicating authority has the discretion to impose a penalty which is even less than the said minimum. (10) Supreme Freight Services Another v. C.C.E., Bangalore-I - 2004 (60) RLT 181 (CESTAT - Ban.) - In this order dated 26-9-2003, the same Bench that has passed the order at Sr. No. 9 abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount of service tax that he failed to pay. 12. The construction of Section 76, as has been interpreted by some of the Tribunal Benches, clearly requires that the penalty shall not be less than one hundred rupees. The law as such does not require the amount of penalty to be read as one hundred rupees for every day of delay. The language of the section does not warrant the expression "for every day during which such failure continues" to qualify one hundred rupees since such expression has been put only after the words "but which may extend to two hundred rupees." Since the said section provides for payment of tax as well as the interest to take care of any pecuniary advantage gained by the tax payer by delayed payment of tax, it is understandable that the minimum penalty prescribed is Rs. 100/- only and not Rs. 100/- per day which would be draconian in its effect. The rationale for prescribing a minimum penalty of Rs. 100/- is also understandable as a smaller amount than that would be a paltry amount not worth the effort of collecting it. I, therefore, hold that the minimum penalty prescribed under the said Section 76 of F.A. 94 is Rs. 100/- only and not Rs. 100/- per day ..... X X X X Extracts X X X X X X X X Extracts X X X X
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