Judgment:
1. Heard both sides. The assessee is in appeal against the order passed by the Commissioner of Central Excise and Customs, Nasik for enhancing the penalty amount to Rs. 1,04,658/- from Rs. 4.000/- as imposed by the Assistant Commissioner under Section 76 of the Finance Act. The assessee is engaged in rendering tour operator services and got registered under the provisions of Finance Act 1994. It is alleged that the assessee has failed to pay the service tax and to file return for the period from October 2000 to December 2001 on or before the stipulated period. A show cause notice was issued, on 7.1.2002 for contravention of the provisions under Section 68 and Section 70 of the Finance Act, 1994 and proposing penalty under Section 76 and Section 77 ibid. The Assistant Commissioner (Service Tax), Central Excise & Customs, Nasik-IV accordingly adjudicated the mater and imposed penalty of Rs. 4000/- under Section 76 and Rs. 300/- under, Section 77. It is relevant here to mention that the assessee has paid Rs. 70,737/- with interest thereon amounting to Rs. 7,300/- before issue of show cause notice for the period pertaining to October 2000 to June 2001. After issue of show cause notice for the period pertaining to July 2001 to December 2001 a sum of Rs. 34,285/- with interest there on amounting to Rs. 5,500/- was paid by the assessee. After adjudication order the assessee has also paid penalty of Rs. 4000/- and Rs. 300/- as imposed against them. Again the assessee was served a show cause notice by the Revisionary Commissioner proposing to enhance penalty @ Rs. 100/- per day for which assessee has again suitably replied. There upon he Commissioner Central Excise and Customs (ST), Nagpur has reviewed the matter and enhanced the penalty to Rs. 1,04,658/- while interpreting the scope and object of Section 76 of the Finance Act and relying upon the Large Bench decision in the case of ETA Engineering Limited v.Commissioner of Central Excise, Chennai . Hence this appeal by the assessee.
2. As seen from the impugned order the Ld. Commissioner has observed that the Assistant Commissioner in imposing lesser penalty of Rs. 4000/- exercised the discretion which is not vested with him and further more no reason has been assigned properly within the meaning of Section 80 in establishing the fact of reasonable cause for failure to pay the tax amount and failure to file returns. In addition to that the ld. Commissioner did not agree with the reasons submitted by the assessee for late payment of service tax and late filing of returns, as they are found not satisfactory by him.
3. The ld. Counsel for the appellants contends that earlier the assessee was prompt in payment of service tax and also in filing returns but during relevant period due to non availability of the funds and due to not receipt of the payments from the major corporate customers the service tax amount could not be paid in time. This ground appears to be the main ground for their failure to pay service tax.
4. The ld. JDR Shri Jadhav submits that the activity of levying service tax does arises when the assessee receives the payment of service charges after rendering the services by the service provider. As such the defense put forth by the assessee that the funds were not available and the bills were received late is not a plausible explanation. In short, the contention of ld. JDR is that the assessee has to pay the service tax after his receipt of the service charges only. He also brings to my notice Rule 6 of the Service Tax Rules 1994 which reads as follows. "6. Payment of service tax - (1) The service tax on the value of taxable services received during any calendar month shall be paid to the credit of the Central Government by the 25^th of the month immediately following the said calendar month. He also brings to my notice the chart drawn by Assistant Commissioner in his impugned order at Page 23. The relevant chart shows in the first column the period for which service tax is due the second column represents service tax due / paid, the third column represents due date of payment of service tax and fourth column represents the actual dale of payment of service tax.
According to the ld. JDR the assessee has received the service charges which includes the service tax shown in column No. 2 prior to its due date shown in column No. 3. Whereas, the ld. Counsel for the appellants disputes the fact on the ground that the assessee did not received the payment of service charges during that period as contended by the ld.JDR and they have evidence to show about late receipt of the payment beyond the dates mentioned in the column No. 3 of the table. Otherwise, they would have paid the tax amount promptly as in the past. This aspect has not been discussed at all in both the impugned orders.
5. In respect of waiver of penalty amount as provided under Section 80, the ld. Counsel for the appellants submits that non availability of the funds due to non receipt of the amount from the corporate customers is the major cause and this has not been appreciated by both the authorities below for waiving the penalty amount. No other reason could be fit better than what is shown as the defiance in their reply notice for the purpose invoking Section 80. Therefore, on appreciation of the above referred circumstances, the appellant also pleads for completed waiver of penalty amount as provided under Section 80 on the ground that they have established and shown reasonable cause. The Assistant Commissioner after verifying the bills and vouchers as submitted before him by the assessee or would be submitted during the personal hearing during the denova proceedings shall take into consideration and decide the matter afresh including the plea of Section 80. The Assistant Commissioner shall also refer to the evidence produced by the assessee such as bills and vouchers evidencing the receipt of the amount of service charges from the clients and the assessee and levy the service tax in accordance with Rule 6 of the Service Tax rules after computing the delay if any. Accordingly the matter is remanded back to the original adjudicating authority for consideration of the aforesaid issues and for fresh finding there on in accordance with law. In the result appeal is allowed in remand in above terms.