Penalties & Prosecution

Failure toPenalty upto 7-4-2011Penalty w.e.f. 8-4-2011
Get registrationHigher of:Higher of:
However, w.e.f May 10, 2013, a flat penalty of Rs 10,000/-
Maintain or retain books of account or documentsUpto Rs.5,000Upto Rs.10,000
Furnish information/produce documents/appear before Central Excise Officer, when calledHigher of:Higher of:
Pay tax electronically when requiredUpto Rs.5,000Upto Rs.10,000
Account for an invoice or in case of incomplete invoicesUpto Rs.5,000Upto Rs.10,000
Any other contraventionUpto Rs.5,000Upto Rs.10,000

Section 76 (as effective from 14.05.2015)

 

Section 76 as amended w.e.f. 14.05.2015 provides for levy of penalty in circumstances other than those having means rea or intent to evade tax.  Penalty in such cases shall be determined as under:

Where such service tax and interest is paid within a period of thirty days of the date of service of notice under sub-section (1) of section 73 i.e. within thirty days of receipt of Show Cause notice No penalty
Where such service tax and interest is paid within a period of thirty days of the date of the date of receipt of the order of the Central Excise Officer determining the amount of service tax under sub-section (2) of section 73 The penalty payable shall be 2.5% percent of the tax, provided such reduced penalty is also paid within such period
In other cases 10% of Tax involved

Section 78 (as effective from 14.05.2015)

Section 78(1) of the Finance Act, 1994 provides that penalty shall be imposed when service tax has not been levied or paid or has been short-levied or short paid or erroneously refunded due to any of the following reasons:

  1. Fraud;
  2. Collusion;
  3. Willful mis-statement;
  4. Suppression of facts;
  5. Contravention of any provision

Penalty shall be equal to hundred per cent. of the amount of such service tax. 

However, in following circumstances, the penalty shall stand reduced automatically:

Where such service tax and interest is paid within a period of thirty days of the date of service of notice under sub-section (1) of section 73 Penalty payable shall be 15%. of such service tax, provided such reduced penalty is also paid within such period
Where such service tax and interest is paid within a period of thirty days of the date of the date of receipt of the order of the Central Excise Officer determining the amount of service tax under sub-section (2) of section 73 the penalty payable shall be 25%. of the service tax so determined, provided such reduced penalty is also paid within such period

W.e.f. May 14, 2015 Section 80 (Penalty not to be imposed in certain cases) has been deleted.