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2015 (12) TMI 1450 - MADRAS HIGH COURT

2015 (12) TMI 1450 - MADRAS HIGH COURT - 2016 (41) S.T.R. 802 (Mad.) , [2016] 92 VST 35 (Mad) - Delayed filings of return - Penalty u/s 76 - claim of relief for waiver of penalty u/s 80 - outdoor publicity services - Held that:- t the appellant had not furnished any material to substantiate its claim that it was under severe financial hardship. - no materials were made available, by the appellant, to show that the erstwhile partnership firm had been converted into a sole proprietary concern. The .....

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son to interfere with the impugned order passed by the Tribunal, dated 22.11.2010. Further, it is seen that the decisions relied on by the learned counsel, appearing on behalf of the appellant, are not applicable to the facts and circumstances of the present case. - C. M. A. No. 2072 of 2011 - Dated:- 16-12-2015 - M. Jaichandren And S. Vimala, JJ. For the Appellant : Mr. N. Viswanathan For the Respondent : Mr. Vikram Ramakrishnan JUDGMENT This Civil Miscellaneous Appeal has been filed, under Sec .....

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advertising services. The appellant had voluntarily registered itself with the authorities concerned, on 26.2.1998, and had also obtained a certificate of registration. Due to the misunderstanding that had developed between the partners of the partnership firm and on account of severe business losses, it could not pay the tax in respect of its business activities and therefore, no returns had been filed, for the period, from May 1997 to March 2000. 3. It has been further stated that the partner .....

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s of the appellant. 4. It had been further stated that, on 21.3.2003, a show cause notice had been issued to the appellant demanding the payment of the interest on the belated payment of the taxes, for the period covering, May 1997 to March 2000. A penalty had also been proposed, under Section 76 of the Finance Act, 1994, for the failure of the appellant to pay the tax in time, as required under Rule 6 of the Service Tax Rules, 1994, read with Section 68 of the Act. However, the appellant had re .....

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and interest before the passing of the adjudication order. 5. It has been further stated that the Deputy Commissioner of Central Excise (ST), Chennai II Commmissionerate, had passed the order, in Order-in Original No.22/2003, dated 6.10.2003, imposing the maximum penalty, as provided under the Act, stating that no justification had been found for the failure of the appellant to pay the service tax in time, from May 1997 to March 2000. The appellant had filed an appeal against the said order, be .....

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0 of the Act, in a proper manner. 6. Aggrieved by the order passed by the Commissioner of Central Excise (Appeals), the appellant had preferred an appeal before the Customs Excise and Service Tax Appellate Tribunal, in ST/30/2004. The Tribunal had passed the impugned order, dated 19.11.2010, confirming the orders passed by the lower authorities. The Tribunal had passed the said order holding that there were no sufficient grounds to extend the protection from imposing of penalty on the belated pa .....

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ned counsel appearing for the appellant had submitted that the order passed by the Tribunal is illegal and void, as it has been passed in violation of the principles of natural justice. The Tribunal had erred in not exercising its discretion conferred on it, under Section 80 of the Finance Act, 1994. The Tribunal had not considered the reasons adduced by the appellant for the waiver of the penalty. The Tribunal ought to have considered the fact that the appellant had paid the tax, voluntarily, e .....

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r the period, from May 1997 to April 2000. On scrutiny of ST - 3 returns filed by the appellant, it had been found that the appellant had paid the tax well beyond the due dates. However, no interest had been paid for the belated payment of tax. Therefore, a show cause notice, dated 21.3.2003, had been issued to the appellant, seeking to impose a penalty of ₹ 200 per day, for the belated payment, in terms of Section 76 of the Finance Act, 1994. Vide order in Original, dated 6.10.2003, the p .....

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the Order-in-Original, dated 6.10.2003, had been challenged by the appellant, before the Commissioner of Central Excise (Appeals). The first appellate authority, after examining the case records and the submissions made on behalf of the appellant, had passed an order, dated 27.1.2004, rejecting the appeal filed by the appellant, as there was no infirmity in the order under appeal. 11. Aggrieved by the said order, the appellant had approached the the Customs, Excise and Service Tax Appellate Tri .....

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second respondent had submitted that the order of the Tribunal in rejecting the appeal of the appellant is correct in the eye of law. No materials had been furnished by the appellant to substantiate its claim that it was under severe financial hardship. Further, no materials were made available, by the appellant, to show that the partnership firm had been converted into a sole proprietary concern. The service tax payable by the appellant, for the period, from May 1997 to April 2000, had not been .....

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STEEL LTD., Vs. STATE OF ORISSA (1978 (2) E.L.T. (J 159) (S.C.), the Supreme Court had held that no penalty should be imposed for technical or venial breach of legal provisions or where the breach flows from the bona fide belief in the manner prescribed by the statute. 13.2. In D.R.GADE Vs. COMMISSIONER OF CUSTOMS, NASIK, 2006 (2) S.T.R. 205 (Tri. - Mumbai), the Customs Excise and Service Tax Appellate Tribunal, West Zonal Bench, Mumbai, had held that the appellant therein had paid the tax amou .....

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, COIMBATORE Vs. BUSY BEE 2015 (37) S.T.R. 932 (MAD.) the Division Bench of this Court had held that the penalty imposed on the assessee would not be sustainable if the assessee proves the reasonable cause for its failure to pay the tax and if there was no contumacious conduct or deliberation or violation of the statute by the assessee. The mere payment of the service tax, which had been done belatedly, and the payment of interest thereon, cannot be taken to be a sufficient cause for the exercis .....

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t the appellant/assessee was not aware of the provisions of law and as a result, continued to operate as they were operating earlier. The intention behind introduction of provisions of Section 80 of the Finance Act, 1994, is to ensure that the assessees, who had not paid the tax, can make the payment with interest and a lenient view can be taken with regard to the payment of penalty in cases where there is lack of knowledge and reasonable cause for such non payment. 14. The learned counsel appea .....

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