By TIOL News Service

MUMBAI, MAY 25, 2018: THE appellant disputes the imposition of late fee/penalty u/s 70 of the Finance Act, 1994 read with rule 7C of the Service Tax Rules, 1994.

Incidentally, the said penalty was reduced to Rs.20,000/- by the Commissioner (Appeals), Kolhapur.

Furthermore, in the proceeding that was initiated against the appellant, penalty under section 77 was not imposed but the late fee/penalty under rule 7C was confirmed.

None appeared for appellant.

After hearing the AR, the Bench inter alia observed thus -

++ The rule itself provides for and prescribes the quantum of fee that devolves upon dereliction.

++ In these circumstances, there is a legal obligation on the part of the assessee to discharge this late fee without the intervention of the adjudicating or any other authority designated in Finance Act, 1994.

++ Consequently, in the absence of any other detriment to the appellant, the impugned order, or its forerunner order-in-original, are not pre-requisites for fastening of the statutory obligation on the appellant.

Holding that, notwithstanding the justification for such failure, the appellant had no ground to seek relief which is not available under rule 7C of the Service Tax Rules, 1994, the appeal was dismissed.

Quick reference:

70. Furnishing of returns

(2) x x x

7C. Amount to be paid for delay in furnishing the prescribed return.-

(i) x x x;

(ii) x x x; and

(iii) x x x:

Provided that the total amount payable in terms of this rule, for delayed submission of return, shall not exceed the amount specified in section 70 of the Act:

(See 2018-TIOL-1613-CESTAT-MUM)