TMI Blog2014 (4) TMI 843X X X X Extracts X X X X X X X X Extracts X X X X ..... o levy service tax on scientific technical consultancy service had resulted in an order of adjudication by which the demand had been dropped on 28 December 2006 - adjudicating authority had correctly granted to the assessee the benefit of the provisions of section 80 of the Finance Act, 1994 as it then stood by deleting the penalty and that the exercise of revisional jurisdiction under section 84 by the Commissioner was not in accordance with law - Decided in favour of assessee. - Central Excise Appeal No. - 67 of 2014 - - - Dated:- 1-4-2014 - Dr. Dhananjaya Yeshwant Chandrachud,CJ And Hon'ble Dilip Gupta,JJ. For the Appellant : Vivek Chaudhary,Adarsh Bhushan,Pankaj Bhatia For the Respondent : Ashok Singh, Sr. S. C. ORDER This appeal by the assessee arises from a judgment of the Customs, Excise Service Tax Appellate Tribunal dated 24 January 2014. By the judgment which is impugned, the Tribunal has dismissed the appeal filed by the assessee against an order of the Commissioner, Central Excise, Meerut-I passed in exercise of the revisional powers conferred by section 84 of the Finance Act, 1994 imposing penalties on the assessee under sections 76, 77 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant, it did so, since it was entitled to CENVAT credit in respect of all the taxes paid. On 24 February 2009, the Additional Commissioner passed an order of adjudication holding that the assessee was liable to pay service tax and that the extended period could be invoked. Moreover, it was held that the transaction between the assessee and KSA constituted 'Intellectual Property Service' and was liable to service tax with effect from 10 September 2004. However, the adjudicating authority proceeded not to impose any penalty, giving to the assessee the benefit of section 80 of the Finance Act, 2004. The adjudicating officer was of the view that the issue involved interpretation of legal provisions which had resulted in non-payment of service tax in time. The assessee had obtained registration for service tax under the category of 'Intellectual Property Right Services' on 30 September 2006 in respect of the agreement with KSA and was paying service tax since October 2007. Moreover, it was noted that the assessee had paid the entire service tax dues together with interest covering the period from 10 September 2004 to 30 September 2007 on 10 December 2008. Bearing in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 of the Act? 3. Whether the Commissioner in exercise of his revisional power under section 84 of the Act can reverse the discretion exercised by the adjudicating authority under section 80 of the Act? Prior to 18 April 2006, section 76 provided as follows:- Any person, liable to pay service tax in accordance with the provisions of section 68 or the Rules made under this Chapter, who fails to pay such tax, shall pay, in addition to such tax and the interest on that tax amount in accordance with the provisions of section 75, a penalty which shall not be less than one hundred rupees for every day during which such failure continues but which may extend to two hundred rupees for every day during which such failure continues, so, however, that the penalty under this clause shall not exceed the amount of service tax that he failed to pay. The provisions of section 76 for the period with effect from 18 April 2006 are as follows:- Any person, liable to pay service tax in accordance with the provisions of section 68 or the Rules made under this Chapter, who fails to pay such tax, shall pay, in addition to such tax and the interest on that tax amount in accordance with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct to a minimum and a maximum with a ceiling that the total penalty would not exceed the amount of service tax. Section 77 similarly contains a mandate under which a penalty is imposed where a person has contravened the provisions of the Chapter or any rule made thereunder where no separate provision for penalty is provided elsewhere in the Chapter. Section 78 similarly provides for a mandate of a penalty but deals with a situation where service tax has not been levied or paid or has been short-levied or short paid or erroneously refunded, by reason of (i) fraud; or (ii) collusion; or (iii) willful mis-statement; or (iv) suppression of fact; or (v) contravention of any of the provisions of the Chapter or the rules with intent to evade the payment of service tax. Under section 78 the minimum penalty is the amount of service tax which is not levied or paid or short-levied or short-paid or erroneously refunded while the maximum penalty is twice that amount. Section 76 deals with a situation where a person, who is liable to pay service tax, fails to pay such tax. Section 76 does not deal with an aggravated situation which is specifically dealt with in section 78. Section 78 deals with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... render the non-obstante provision of section 80 otiose. For, it would then have to be held that once a penalty has become imposable under section 78, it would be inconsistent to allow the assessee to establish that there was a reasonable cause for the failure. The words which have been used in the Statute in the present case in section 80 cannot be regarded as being redundant or otiose. Consequently, in our view the Tribunal was in error in coming to the conclusion that there would be no occasion to establish a reasonable cause within the meaning of section 78, once, the extended period of limitation had been validly invoked under the proviso to section 73(1). If the analogy which has been used by the Tribunal is extended, it would have to be held that section 80 would have no application whatsoever to a case which falls within the purview of section 78 since as we have noted, the language of section 78 is similar to the language which is used in the proviso to section 73(1). Accepting such an interpretation would involve re-writing the provisions of section 80 by excluding the provisions of section 78 from the non-obstante clause which is contained in section 80. This would be, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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