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The Commissioner of Central Excise, Central Excise Commissionerate Versus M/s. Joe Transport, Customs, Excise & Service Tax Appellate Tribunal

2015 (5) TMI 145 - MADRAS HIGH COURT

Wilful suppression of the value of taxable services - Simultaneous Penalty u/s 76 & 78 - Held that:- Even when penalty under Section 76 of the Finance Act, 1994 has been imposed, penalty under Section 78 of the Finance Act, 1994 is also imposable. - Tribunal has come to an erroneous conclusion that once penalty is imposed under Section 76 of the Finance Act, 1994, there is no necessity for imposition of penalty under Section 78 of the Finance Act, 1994 - The above view of the Tribunal runs contr .....

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Court by filing the present appeal. This Court, vide order dated 12.4.2011, while admitting the appeal, framed the following substantial questions of law for consideration :- "1) Whether the Hon'ble Tribunal is legal and correct in setting aside the penalty imposed under Section 78 of the Finance Act, 1994, when there was wilful suppression of facts with an intent to evade service tax, as vividly brought out in the show cause notice which was affirmed in Order-in-Original? 2) Whether th .....

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rvice tax of ₹ 4,04,132/- was passed together with education cess of ₹ 2,317/- totalling to ₹ 4,06,449/- for the period June, 2001 to December, 2005 under proviso to Section 73 (1) of the Finance Act, 1994. In addition to the above, penalty of ₹ 4,06,449/- under Section 78; penalty of ₹ 100/- per day from the date on which service tax for the amount of June, 2001 was ought to have been paid till the date of payment, subject to a maximum of ₹ 4,06,449/-, under .....

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ieved against the said order of the Commissioner (Appeals), the assessee filed appeal before the Tribunal and the Tribunal, while set aside the penalty imposed under Section 78 of the Finance Act, however, directed the assessee to pay interest on the delayed payment of tax forthwith. Aggrieved by the said order of the Tribunal, the appellant/Revenue is before this Court by filing the present appeal. 4. Heard the learned standing counsel appearing for the appellant/Department and the learned coun .....

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below :- "12. From the above it is also seen that Joe Transport have intentionally suppressed the taxable services provided by them to the organizations like CPCL, GAIL, etc., with an intention to evade payment of service tax. The taxable services provided by Joe Transport were brought to light only by the investigations conducted by the department. Hence, the amount of ₹ 4,06,449/- (Service Tax : ₹ 4,04,312/- and Education Cess : ₹ 2,317/-) being the service tax payable b .....

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essed the value of taxable services rendered by him and did not pay service tax, they are liable to penal action under Section 78 and Section 76 of the Finance Act, 1994. Further, they registered with the department only in 2003 and did not file the statutory returns in terms of Section 70 of the Finance Act, 1994. For the above contraventions, I find that Joe Transport are liable to penal action under erstwhile Section 75A and Section 77 of Finance Act, 1994. Further Joe Transport failed to pay .....

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port, Nagapattinam, under proviso to erstwhile Section 73 (a)/Section 73 (1) (a)/ present Section 73 (1) of the Chapter V of the Finance Act, 1994; ii. I appropriate an amount of ₹ 4,06,449/- out of the total amount of ₹ 5,89,971/- already paid by them, against the service tax due as in (i) above; iii. I confirm the demand of ₹ 1,77,296/- (Rupees One Lakh Seventy Seven Thousand Two Hundred and Ninety Six only) being the amount representing service tax collected from GAIL, on Jo .....

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nsport, under Section 78 of the Finance Act, 1994; vi. I appropriate the balance amount of ₹ 6,227/- (Rupees Six Thousand Two Hundred and Twenty Seven only) out of the amount of ₹ 5,89,971/- already paid by them, towards the penalty due in (v) above; vii. I impose a penalty of ₹ 100/- (Rupees Hundred only) per day, from the date on which service tax for the amount of June, 2001 is ought to have been paid till the date of payment of service tax as in (i) above, subject to a maxi .....

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uppression on the part of the assessee stands proved, the Department is empowered to impose penalty under Section 76 as well as under Section 78 of the Finance Act, 1994, and that the imposition of penalty is mandatory and is not at the discretion of the authority. 7. The question of imposition of penalty has been decided by the 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 pen .....

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en given. 27. Above being the position, the plea that the Rules 96ZQ and 96ZO have a concept of discretion inbuilt cannot be sustained. Dilip Shroff's case (supra) was not correctly decided but Chairman, SEBI's case (Supra) has analysed the legal position in the correct perspectives. The reference is answered...." 8. Similar view was taken by the Supreme Court in Union of India v. Rajasthan Spinning & Weaving Mills, 2009 (238) ELT 3 (SC). It is apposite to refer to paragraphs (2 .....

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