Commissioner of Service Tax Vs. Global Enterprises - Court Judgment

Excerpt:
.....2,34,881/- imposed under section 76 of finance act, 1994, should not have been waived by the lower appellate authority, when there was a breach of law. there was no reasonable cause on the part of the respondent to withhold the tax amount for which penalty was leviable.4. record revealed that respondent has discharged its tax burden and also paid interest on the due to union of india. but belatedly. the lower appellate authority found that payment of interest itself is penalty in character. but such view of the lower appellate authority is not appreciable because interest and penalty are two different consequences prescribed by statute. however, good conduct of the respondent having been found on record by the lower appellate authority, imposition of penalty at the initial stage of.....

Judgment:
1. Revenue's grievance is that penalty of Rs. 2,34,881/- imposed under Section 76 of Finance Act, 1994, should not have been waived by the lower Appellate Authority, when there was a breach of law. There was no reasonable cause on the part of the Respondent to withhold the tax amount for which penalty was leviable.

4. Record revealed that Respondent has discharged its tax burden and also paid interest on the due to Union of India. But belatedly. The lower Appellate Authority found that payment of interest itself is penalty in character. But such view of the lower Appellate Authority is not appreciable because interest and penalty are two different consequences prescribed by Statute. However, good conduct of the Respondent having been found on record by the lower Appellate Authority, imposition of penalty at the initial stage of implementation of law is a considerable hardship. His appreciation on the basis of facts and circumstances on record, is not liable to be discarded for reasoned order passed. Accordingly, first Appellate Authorities' order is upheld dismissing appeal of Revenue.