1. Heard both sides. The defects pointed out by the registry has been rectified by the appellant. After hearing the case for some time, I dispense with the requirement of pre-deposit and proceed to decide the appeal.
2. The appellant is an Architect. The original authority in his order has confirmed and appropriated the amount of service tax of Rs. 37,309/- and the interest of Rs. 16,603/- paid on account of delayed payment. He has also imposed a penalty of Rs. 4,0007- under Section 76 and a penalty of Rs. 500/- under Section 77 of the Finance Act, 1994.
The impugned order has been passed by the jurisdictional Commissioner revising the order of the original authority and enhancing the penalty of Rs. 4,000/- under Section 76 to Rs. 37,309/-.
3. The appellant states that the imposition of the service tax on the Architects was before the court and that he was also unaware of the tax liability which laid to the delay in payment and that he had no intention to evade the tax. He states that the amount of penalty enhanced by the Commissioner is harsh and pleads for setting aside the said enhancement.
4. I find that the Commissioner has totally overlooked the provision of Section 80 of the Finance Act, 1994 which reads as under :- Notwithstanding anything contained in the provisions of Section 76, Section 77, Section 78 or Section 79, no penalty shall be imposable on the assessee for any failure referred to in the said provisions, if the assessee proves that there was reasonable cause for the said failure.
I also find that the appellant has paid the tax amount in full and also the interest amount which is about 40% of the tax amount. As such, any pecuniary advantage gained by the appellant is neutralized by payment of interest. Moreover, the appellant's case squarely falls under the provision of Section 80 of the Finance Act, 1994. The appellant being a small tax payer, the revised penalty imposed by the Commissioner is unduly harsh on him. Accordingly, I set aside the impugned order and restore the penalty amount under Section 76 of the Finance Act, 1994 to the originally determined amount of Rs. 4,000/- by the adjudicating authority. The appeal is allowed in the above terms.