By TIOL News Service

MUMBAI, JAN 01, 2018: RULE 7C [Amount to be paid for delay in furnishing the prescribed return] of the STR, 1994 begins thus –

"Where the return prescribed under rule 7 is furnished after the date prescribed for submission of such return, the person liable to furnish the said return shall pay to the credit of the Central Government, for the period of delay of -"

In Rule 7 [Returns] of the STR, the following sub-rule was inserted by notification 43/2011-ST dated 25.08.2011 (w.e.f 01.10.2011) -

"(3) Every assessee shall submit the half-yearly return electronically."

In the present appeal, the challenge is to the penalty of Rs.40,000/- imposed in terms of provisions of Rule 7C of Service Tax Rules, 1994 on the ground that though the appellant had filed manual service tax returns in time but the same were not filed electronically and were filed subsequently and as such there was a delay which invited penal action.

The Bench observed -

"…On going through the said Rule which prescribed for penalty of Rs.2,000/- for late filing of the ST returns. However, the said rule is silent on penalty if the ST returns are filed manually in time but are not filed electronically."

Noting that since the returns were filed well within the time, though manually, the imposition of penalty on the appellant was not called for, the same was set aside and the Appeal was allowed with consequential relief.

(See 2018-TIOL-11-CESTAT-MUM)