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2020 (2) TMI 304 - MADRAS HIGH COURTReduction in the quantum of penalty imposed u/s 78 - Assessee paid the said short levied service tax only upon the Audit Objection raised in the matter - Section 73(3) and sub-section (4) of the Act - HELD THAT:- The Audit Objection raised by the Audit Officer is also ascertainment of tax by a Central Excise Officer within the meaning of Section 73(3) of the Act and there is no dispute that an Auditor of the Department is also a Central Excise Officer. Therefore, payment of the service tax with interest by the Assessee in the year 2013 itself, of course, not on his own or suo motu but on the basis of the Audit Objection viz., on the basis of the determination by an Auditor of the Department would not take out the case of the Assessee from the ambit and scope of Section 73(3) of the Act. Therefore, the question of imposition of penalty under Section 78 of the Act on the Assessee would not arise in the present case. Unless the penalty under Section 78 of the Act itself is leviable on the Assessee, there is no question of any reduction of the quantum of penalty to 25% thereof by the learned Tribunal in its discretion. What is not at all leviable, cannot be reduced. The Assessee is entitled to get the relief in the present case and the Appeal filed by the Assessee deserves to be allowed - the penalty order of original adjudicating Authority as well as that of the learned Tribunal upholding the imposition of penalty under Section 78 of the Act to the extent of 25% both deserve to be set aside - Appeal allowed.
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