Order Date – 19 September 2022

 Facts –

• The Appellant, Jain Products,  was issued order-in-original confirmed the demand under the head of GTA Service in respect of freight amount exceeds to Rs. 750/- and Rs. 1500/-.
• The challenge of the Appellantis limited to the penalty of 75%. The Appellantcomplying with the option given by Adjudicating Authority, though paid 25% of penalty but after the stipulated time of one month.
• The Appellant has submitted that there is only delay in payment of 25% penalty which is in accordance with the option given by the Adjudicating Authority. Appellant has otherwise regularly paid the service tax as per bonafide belief in respect of cases where freight was paid above Rs. 750/- and Rs. 1500/-. Therefore there is no intention to evade payment of service tax.

Issue – 

• Whether the appeal for waiver of penalty of 75% under Section 78 of Finance Act, 1994 invoking Section 80 be allowed or not?

Order –

• The Hon’ble Tribunal observed that the appellant has made ground against confirmation of demand and conceded that the appellant is contesting only for 75% penalty imposed under Section 78 of Finance Act, 1994.
• The Appellant have paid 25% penalty after the stipulated time period of 30 days.  The said period is statutory, same cannot be relaxed. 
• However, the Tribunal also observed that the appellant was paying service tax as per the belief that service tax is payable only in cases where freight amount is exceeding Rs. 750/-. There is only a misunderstanding about the calculation of limit of Rs. 750/-. Moreover, the appellant have paid entire service tax, interest and 25% penalty.
• Thus, the Tribunal set-aside penalty of 75% under Section 78 of Finance Act, 1994 invoking Section 80.
• Hence, the appeal is partly allowed in above terms.