9911796707
TMI Blog2015 (1) TMI 812X X X X Extracts X X X X X X X X Extracts X X X X ..... to Rs. 2,65,429/- for the period 10.9.04 to 30.6.06 under proviso to Section 73 (1) of the Finance Act, 1994. In addition to the above, penalty of Rs. 10,000/- under Section 76, Rs. 1,000/- under Section 77 and Rs. 10,000/- under Section 78 of the Act were also imposed on the assessee. The demand of interest on tax was also confirmed in terms of Section 75 of the Act. The order of adjudication was accepted by the party and no appeal has been filed and, therefore, it remained unchallenged. 3. The department, however, was of the view that penalty imposed under Section 78 of the Act was not in terms of the Act, when there is a finding of wilful suppression, and that the amount of penalty levied should have been equal to the tax liability as provided under Section 78 and, therefore, the jurisdiction authority, exercising the power under Section 84 by way of revision, passed the following order :- (i) I impose a penalty of Rs. 200/- per day on the noticee in respect of the period from 10.09.2004 to till the date of payment of service tax due, not exceeding the service tax payable under the provisions of Section 76 of Finance Act, 1994. (ii) I appropriate the amount of Rs. 10,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner shall give the assessee a reasonable opportunity of being heard." Aggrieved against the said order of the Tribunal, the present appeal has been filed by the assessee. 6. Heard the learned counsel appearing for the appellant and the learned counsel appearing for the respondents and also perused the documents as also the relevant sections of the Finance Act, 1994. 7. For the first question of law, the answer lies within the said provision itself. The appellant is not able to state under what provision of law penalty can be withheld or not imposed if tax is paid before issuance of show cause notice under the provisions of the Finance Act, 1994. 8. In any event, the said issue now stands resolved by a Larger Bench decision of the Supreme Court in Union of India and others v. Dharamendra Textile Processors and Others, 2008 (231) ELT 3 (SC), wherein it was held that penalty under Section 11AC of the Central Excise Act is mandatory and there is no element of discretion. The relevant portion of the said decision reads as under: "26. In Union Budget of 1996-97, Section 11AC of the Act was introduced. It has made the position clear that there is no scope for any discret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal did not venture to examine this question but merely stated that it need not interfere with the decision of the lower appellate authority. 5. We have perused the grounds of appeal filed by the Revenue before the Tribunal, from which it is seen that the Department has contested the matter regarding imposition of penalty prior to the date of introduction of the said provision, viz., 57-1(4) of the Central Excise Rules, 1944 and thereafter. Therefore, the Revenue having raised such a ground before the Tribunal, the Tribunal ought to have considered the issue and rendered a finding. Without doing so, the Tribunal merely observed that they need not interfere with the decision of the lower appellate authority as regards the penalty for the brief period from 23-7-1996 to 28-9-1996 when the contention of the Department that post 28-9-1996 also the Department was entitled to levy penalty and that the period covered for adjudication was from 1-4-1994 to 30-9-1998. Hence, this question requires consideration of the Tribunal. 6. Accordingly, the matter is remitted back to the Tribunal directing it to consider the question of levy of penalty under Rule 57-1(4) of the Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solved and therefore, as regards the imposition of penalty under Rule 57-I in a sum of Rs. 1,64,687/- could not have been reduced. Whereas, since the discretion is vested with the authority to reduce the penalty under Section 173Q, that is not interfered with. The civil miscellaneous appeal is allowed to the extent indicated above. 12. In the light of the law enunciated in the decisions referred supra, we hold that penalty is imposable even in cases where tax is paid before issuance of show cause notice. The first question of law is answered against the assessee and in favour of the department. 13. Insofar as the 2nd question of law is concerned, we find that the provisions of Section 80 of the Finance Act empowers the authority not to impose penalty, if the assessee proves that there was reasonable cause for the said failure. For better clarity, Section 80 of the Finance Act is extracted hereinbelow :- "80. Penalty not to be imposed in certain cases Notwithstanding anything contained in the provisions of section 76 [section 77 or [first proviso to sub- section (1) of section 78]], no penalty shall be imposable on the assessee for any failure referred to in said provisions, if ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
