Exemplar Nihon Spindle Mfg. Co. P. Vs. Commissioner of C. Ex. - Court Judgment

Excerpt:

.....that the minimum penalty of rs. 100/- is without any reference to the number of days of delay. the commissioner has taken the view that the minimum penalty of rs. 100/- per day and maximum penalty is rs. 200/- per clay.accordingly, she has imposed a penalty of rs. 26,800/- applying maximum of rs. 200/- per day.6. while, we agree with the interpretation of the commissioner in holding that rs. 100/- is not a minimum penalty as held by the assistant commissioner, but rs. 100/- per day, we feel that penalty of rs. 200/- per day is excessive under the given facts and circumstances of the case. therefore, we reduce the penalty to rs. 13,400/- (rupees thirteen thousand four hundred only).7. the appeal is disposed off in the above terms. stay petition is also disposed off accordingly.

Judgment:

1. This appeal is against the Order-in-Revision passed by the Commissioner of Central Excise & Customs, Nasik, vide her Order No.99/NSK/06 dated 1-8-2006.

3. The Assistant Commissioner vide his Order-in-Original No. 224/2004 dated 20-8-2004 confirmed Service tax demand amounting to Rs. 27,568/- and interest Rs. 10,495/-. He also imposed a penalty of Rs. 100/- under Section 76 of the Finance Act, 1994.

4. The Commissioner initiated review proceedings in terms of Section 84 of the Finance Act, 1994 on the ground that penalty imposed was lower than the prescribed minimum penalty and enhanced the penalty to Rs. 26,800/-. There is no dispute about the Service tax payable or interest demand. The dispute relates to interpretation of Section 76, which reads as follows: Penalty for failure to collect or pay Service tax. - Any person, liable to pay Service tax in accordance with the provisions of Section 68 or the rules made thereunder, who fails to pay such tax shall pay in addition to paying such tax. and interest on that tax in accordance with the provisions of Section 75, a penalty which shall not be less than one hundred rupees but which may extend to two hundred rupees for every day during which such failure continues, so, however, that the penalty under this clause shall not exceed the amount of Service tax that he failed to pay.

5. The Assistant Commissioner has taken the view that a penalty should not be less than Rs. 100/- and imposed a penalty of Rs. 100/- even though there was a delay of 134 days. He has taken the view that the minimum penalty of Rs. 100/- is without any reference to the number of days of delay. The Commissioner has taken the view that the minimum penalty of Rs. 100/- per day and maximum penalty is Rs. 200/- per clay.

Accordingly, she has imposed a penalty of Rs. 26,800/- applying maximum of Rs. 200/- per day.

6. While, we agree with the interpretation of the Commissioner in holding that Rs. 100/- is not a minimum penalty as held by the Assistant Commissioner, but Rs. 100/- per day, we feel that penalty of Rs. 200/- per day is excessive under the given facts and circumstances of the case. Therefore, we reduce the penalty to Rs. 13,400/- (Rupees Thirteen thousand four hundred only).

7. The appeal is disposed off in the above terms. Stay petition is also disposed off accordingly.