Commissioner of Service Tax Vs. DolphIn Couriers Pvt. Ltd. - Court Judgment

Excerpt:
1. revenue came in appeal with the only grievance that penalty levied by adjudicating authority should not have been waived by the id.appellate authority without any reason and to support such contention, the id. d.r. relied on the larger bench decision of tribunal in the case of eta engg. ltd. v. commr. of central excise, chennai . he, further, submitted that any breach of law if permitted to perpetuate, that shall encourage the offender to repeat without respect to the statute. therefore, levy of penalty being a remedial measure to remedy mischief, deliberate defiance of law should be rightly redressed by appropriate dose of penalty and that was rightly imposed by adjudicating authority.2. authorised representative for the respondent appearing, supported the order of the authorities.....

Judgment:
1. Revenue came in appeal with the only grievance that penalty levied by adjudicating authority should not have been waived by the Id.

Appellate Authority without any reason and to support such contention, the Id. D.R. relied on the Larger Bench decision of Tribunal in the case of ETA Engg. Ltd. v. Commr. of Central Excise, Chennai . He, further, submitted that any breach of law if permitted to perpetuate, that shall encourage the offender to repeat without respect to the statute. Therefore, levy of penalty being a remedial measure to remedy mischief, deliberate defiance of law should be rightly redressed by appropriate dose of penalty and that was rightly imposed by Adjudicating Authority.

2. Authorised representative for the Respondent appearing, supported the order of the authorities below and prayed for no interference in view of reasoned order passed by the appellate authority.

3. Submission of the Revenue was that waiver of penalty by the appellate authority was done totally ignoring the Larger Bench decision in the case of ETA Engineering Ltd. v. Commr. of Central Excise, Chennai and upholding of order of adjudication would be just and proper and the appellate order when passed on 17-5-2005, the reported decision was very well available before the appellate authority. Therefore, ignorance of such decision has caused irreparable loss to the Revenue.

4. Unfortunately, the Id. D.R. while arguing, has ignored the overriding provision in Section 80 of Finance Act, 1994 which was also subject matter of discussion in the recorded judgement and relying on Section 80, Larger Bench held that no penalty shall be leviable when there is reasonable cause. Therefore, controversy is whether there was a reasonable cause for the present appeal is required to be stated by a speaking order.

5. For the infirmity of no reason stated in the appeal order if there was any, before the appellate authority, the matter certainly requires consideration on the light of provisions contained in Section 80 of the Finance Act, 1994 read with paragraph 8 of the larger Bench decision as aforesaid.

6. In the result, the matter is set aside to the appellate authority below to come to a conclusion whether there was existence of any reasonable cause to arrive at a decision that no penalty is warranted under Section 76 and such a decision is to be dealt in the light of provisions contained in Section 80. It is needless to mention that Section 80 is overriding section and has primacy over Section 76 of the Finance Act, 1994. The appellate authority while deciding the matter shall offer fair opportunity to the Respondent to state the cause/reason which prevented them to comply to the provision of Section 76 and consider the reasons so stated to satisfy mandate of Section 80 for appropriate decision. The impugned order is thus set aside by way of remand and Revenue succeeds partly.