TMI Blog2014 (11) TMI 625X X X X Extracts X X X X X X X X Extracts X X X X ..... of Chapter V of the Finance Act, 1994. The Board's circular relied upon by the appellants clarifies this position. In spite of the clear provision in law and clarification given by the Board in this regard, the appellate authority has completely ignored these provisions and chosen to proceed with imposition of penalties which is clearly unsustainable in law. Therefore, I set aside the penalties imposed on the appellants under Sections 76, 77 and 78 of the Finance Act, 1994. adjudicating authority directed to refund, within a period of one month from the date of receipt of this order, the amount of penalty pre-deposited by the appellants subsequent to passing of the impugned order - Decided in favour of assessee. - Appeal No.ST/536 & 537/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice tax of ₹ 3,24,277/- for the period 10/09/2004 to 31/03/2005 on 26/02/2005. They also paid the interest liability of ₹ 12,410/- on 01/07/2006. Similarly, the other appellant M/s. Sunita Die Parts Pvt. Ltd. has paid the service tax liability of ₹ 1,49,189/- for the period 10/09/2004 to 31/01/2005 on 23/02/2005 and discharged interest liability of ₹ 8,025/- on 29/06/2006. Thereafter, show cause notices dated 13/04/2007 were issued to the appellants demanding service tax along with interest and appropriation of the same and proposing to impose penalties under Sections 77 and 78 of the Finance Act, 1994. The learned counsel submits that as per the provisions of Section 73(3) of the Finance Act, 1994 when the service t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ully considered the submissions made by both the sides. 7. Section 73(3) along with explanation reads as follows: 73. Recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded (3) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person chargeable with the service tax, or the person to whom such tax refund has erroneously been made, may pay the amount of such service tax, chargeable or erroneously refunded, on the basis of his own ascertainment thereof, or on the basis of tax ascertained by a Central Excise Officer before service of notice on him under sub-section (1) in respect of such service tax, and inform the Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue of show cause notice. The explanation makes it abundantly clear that once the payment are made, no penalty can be imposed under the provisions of Chapter V of the Finance Act, 1994. The Board's circular relied upon by the appellants clarifies this position. In spite of the clear provision in law and clarification given by the Board in this regard, the appellate authority has completely ignored these provisions and chosen to proceed with imposition of penalties which is clearly unsustainable in law. Therefore, I set aside the penalties imposed on the appellants under Sections 76, 77 and 78 of the Finance Act, 1994. I also direct the adjudicating authority to refund, within a period of one month from the date of receipt of this order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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