Penalty for delay in payment of service tax for no willful default can be waived

CESTAT, NEW DELHI BENCH

HCL Info Systems Ltd.

Versus

Commissioner of Central Excise, Noida

Final Order No. 768-2012 OF SM (Br)

Appeal No. ST/1196 of 2010-SM

June 18, 2012

ORDER

1. Shri Krishnan, learned Counsel says that to resolve the dispute at the grass root level the appellant immediately reversed the Cenvat credit to satisfy the audit who pointed out that there was wrong credit availed. There was no questionable conduct of the appellant to impute it to the purview of Section 76 of the Finance Act, 1994 because there was no deliberate breach of law to avoid payment of service tax. The appellant being a big concern due to delay in reconciliation of account the amount in question slipped prior to reconciliation. Therefore, no adverse view may be taken in this regard.

2. Learned D.R. for Revenue submits that when there was default, penalty was imposable.

3. Learned appellate authority has not brought out the reasons, if any, for default in question. Once the cause of default is not traced, it is not possible to determine whether that was reasonable or not. There is no whisper about deliberate breach of law by the appellant which normally is consideration while invoking penalty provision. Penalty being not automatically leviable and also no wilful breach of law is there, the matter deserves to be considered from the point of peculiar circumstances. It appears that from the aforesaid observations and finding of both the authorities below that the appellant may not be denied the benefit of Section 80 of the Finance Act, 1994. Accordingly, penalty of Rs. 2,70,467/-is waived out and appeal is allowed confirming the tax and interest, if any, payable.

NF