TMI Blog2016 (2) TMI 1035X X X X Extracts X X X X X X X X Extracts X X X X ..... 016 - Dated:- 8-2-2016 - Sulekha Beevi C.S. (Judicial Member) For the Assessee : G. Natarajan, P. Dwarakanath For the Department : C. S. Raju and Shastry, AR ORDER Sulekha Beevi C.S. (Judicial Member) 1. The appellant is aggrieved by the imposition of penalty under Section 76 of the Finance Act, 1994. 2. The appellant is registered with the Service Tax Department for various services. The appellant defaulted in paying service tax. The jurisdictional super intendant issued letters directing the appellant to pay the defaulted sum. The appellant requested for time as they could not make the payments due to financial difficulties. A show cause notice dated 15-02-2011 was served proposing to impose penalty under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... To substantiate his contentions, he placed reliance on letter issued from Bank to appellant, which showed that the appellant had exceeded the credit limit. Further that due to the bad financial situation, there was a restructuring of debts by the Consortium of Banks. The appellant had to abide by the directions of the restricting package approved by Consortium of Banks Empowered CDR group members. Due to these circumstances, the appellants could not make the payment within time and that there was no intention to evade payment of duty. Appellant use to disclose the liability by filing ST-3 returns. That the appellantshaving explained the reason for failure to pay tax, they should be given the benefit of Section 80 of the Finance Act, 1994. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax on the due date. Essentially, it is compensatory and different form penalty which is penal in character. 6. The Tribunal in the case of Ramanasekar Steels Ltd Vs CCE Chennai 2008(9) STR 132(Tri-Chennai) exonerated the appellants from the penalty imposed under Section 76 as the company was not in a position to discharge the liability of tax, as the company was declared as a sick company. The appellants herein have thereafter discharged their tax liability along with interest. Section 80 provides that if the assessee proves that there was reasonable cause for the failure, no penalty shall be imposable. The poor financial situated of the appellant company is established by the documents submitted by the appellant. In Ralson Carbon Blac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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