ANIL KUMAR YADAV Vs. CCE

JUDGEMENT

(1.) HEARD both sides. Shri M. Karthikeyan, Ld. Advocate appearing for the Appellants states that service tax in respect of supply of labor service was levied with effect from 16.06.2005, the Appellant is an individual and has supplied labor to only one unit, his business was on a very small scale and he was ignorant of the newly introduced legal provisions providing for imposition of service tax. However, when the departmental authorities pointed out the tax liability of the Appellants, he promptly paid the entire amount of service tax along with interest well before the issue of Show Cause Notice. He further states that the original authority has not imposed any penalty under Section 76 and 77 invoking the provisions of Section 80 of the Finance Act, 1994 but has however imposed penalty equal to the service tax amount under Section 78 of the Finance Act, 1994. The Appellant appealed against the said order to the lower appellate authority but the said authority has not considered the plea of the Appellant for waiver of the penalty under Section 78 but has only reduced the same to 25% of the penalty amount taking into account the fact that service tax along with interest was paid before the issue of show cause notice. He pleads that this is a fit case for waiver of penalty under Section 80 as the Appellant was ignorant of the law and he has proved his confide by paying service tax and interest amount.

(2.) HEARD the Ld. SDR, Shri C. Rangaraju. He states that the Appellant has not paid 25% of the penalty amount within one month of the original order and hence full amount of penalty is imposable on them. He supports the grounds of appeal based on which the department's appeal against the impugned order has been filed for enhancement of the penalty amount reduced by the lower appellate authority.