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2014 (12) TMI 545 - CESTAT MUMBAIImposition of penalty u/s 76, 77 & 78 - Simultaneous penalty u/s 76 & 78 - Held that:- As regards the imposition of penalty under Section 76 of the Finance Act, 1994, it is evident from the records that the liability to pay service tax arose in January, 2009 when the bills for the services rendered by the group companies were received by the appellant in December, 2008. Section 78 of the Finance Act, 1944 was amended on 11-5-2008 so as to provide that if penalty is payable under this section, provisions of Section 76 shall not apply. Since in the present case, the liability to pay service tax arose in January, 2009, the question of invoking provisions of Section 76, especially when penalty was considered under Section 78 would not arise at all. Accordingly, the penalty imposed on the appellant under Section 76 is not sustainable in law. Appellant discharged the service tax liability along with interest thereon as soon as the short payment was pointed out to them and they also intimated to the same to the department vide letter dated 22-6-2011 under the provisions of Section 73(3) of the Finance Act, 1994, much before the show cause notice. It is also a fact that these transactions were reflected in the balance sheets of the appellant for the relevant years. These evidences available on records indicate that the appellant had no intention to suppress any information or withhold any information from the department with an intention to evade payment of service tax. In any case the appellant was eligible for Cenvat credit of service tax paid and there was no need for him to evade any payment of tax. In these facts and circumstances, the decision of the Tribunal in the case of Essar Ltd., cited [2008 (11) TMI 105 - CESTAT, AHMEDABAD] squarely applies. Accordingly, we are of the view that the penalty is not imposable on the appellant under the provisions of Sections 77 & 78 of the Finance Act, 1994, in view of Section 73(3) of the Finance Act, 1994 read with Section 80. - Appellant has not disputed service tax and interest liability and therefore, the appropriation of the same by the adjudicating authority is upheld. - Decided in favour of assessee.
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