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M/s. 3 Guys Versus Commissioner of Central Excise- Haldia

2015 (10) TMI 2292 - CESTAT KOLKATA

Penalty under Section 76 and 78 of Finance Act, 1994 – Simultaneous imposition of penalties under Sections 76 & 78 cannot be made applicable to SCN issued after 16/05/2008 when amended provisions of Sec 78 were in force – No intention to evade tax and by invoking Section 80, penalties should be set aside due to financial hardships – Revenue contends that simultaneous penalties are imposable for period prior to 16/05/2008 when Sec 78 was amended – Tax was not paid till detected by department thus .....

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There was suppression of material facts with intention to evade payment of service tax as it was already collected from service recipients but was not paid to department - Extending 25% reduced penalty option on reworked out amount under Sec-78 is required to be decided by original authority – Matter remanded back. - Appeal No. ST/161/11 &ST/ 166/11 - ORDER NO.FO/A/75588-75589/15 - Dated:- 9-10-2015 - SHRI H.K.THAKUR, TECHNICAL MEMBER Shri S.P.Siddhanta, Consultant : For the Petitioner Shri A.R .....

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f of the appellant argued that show cause notice dt 20/7/2009 was issued to the appellant after 16/05/2008 when Sec 78 of the finance Act 1994 was amended. That as per amended Sec 78 of the Finance Act provision relating to simultaneous imposition of penalties under Sec 76 & 78 of the finance Act 1994 was not attracted. That in view of Karnataka High Court s order in the case of CST Bangalore Vs The people s Choice [2014 (36) STR 10 (Kar)] penalty is not impossible. Learned consultant made t .....

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e department. He made the bench go through the relevant ST-3 returns filed by the appellant to argue that in the light of true disclosures made in these returns there can not be any intention to evade payment of Service Tax. That even when extended period was not invokable still appellant made payment of the entire Service Tax alongwith interest much before adjudication. That penalties as per the provisions contained in Sec 80 should be waived as appellant has financial hard ships. It was also t .....

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e laws:- (i) Bajaj Travels Ltd Vs CST [2012 (25) STR 417 (Del)] (ii) Master marine Service (P) Ltd Vs CST Mumbai [2014 (35) STR 79 (Tri-Mumbai)] 3.1. On the issue of imposition of Sec 78 penalty Learned AR argued that appellant in the ST- 3 returns filed, gave a wrong declaration that all the assessed tax has been paid when in fact Service tax was collected from the customers but not paid to the department till detected by the departmental officers. That the act on the part of the appellant was .....

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20/7/2008 issued after amendment dt 16/05/2008 carried out in Sec 78 of the finance Act 1994. (ii)whether penalty under Sec 78 of the finance Act 1994 is attracted against the appellant in the present proceedings. 5. So for as point mentioned at Para- 4 (i) is concerned it is not disputed that show cause notice is issued after the amendment dt 16/05/2008 carried out in Sec 78 of the Finance Act 1994. It is observed from Para-3 of the case law Bajaj Travels Ltd Vs CST (Supra) , relied upon by Lea .....

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wing law & decided the appeal against the Revenue:- 2. We have heard learned counsel for the parties for some time and with their assistance gone through the relevant provision so as to consider the basic question whether the proceedings initiated in respect to the period prior to the amendment by invoking the provision before amendment is vitiated after the amendment? This question was framed at the stage when the appeal was admitted on 16/09/2011. 3. Admittedly, show cause notice was iss .....

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under the provisions of Section 73(1) of the Act invoking the extended period of limitation, and why it should not be recovered under Section 73(2) (a) of the Act. The service tax, according to the appellants, was under the provisions of Section 73(1)(a) of the Act. 4. The provisions contained in Section 73(1) (a) of the Act were substituted vide Finance Act, 2004 with effect from 10/9/2004. The provision prevailing prior to 10/9/2004 was providing for value of taxable services escaping assessme .....

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prevailing was inserted vide Finance Act, 2004 with effect from 10/9/2004 I.e., prior to 6/10/2004 on which date the show cause notice was issued. The Tribunal, on this ground, negated the contentions raised by the appellant. We do not find any reason to interfere with the same in view of the admitted facts, as aforementioned. Hence, we dismiss this appeal. Dismissal of the appeal, however, shall not preclude the appellant from proceeding against the respondent. In accordance with law. 5.1 The r .....

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duty paid made was reflected in the periodical ST-3 returns filed with the department. It was his case that where Service tax was not paid challan numbers were not indicated and penalty under Sec 78 is not imposable because there was no suppression with intention to evade payment of tax. It is also the alternative submission of the appellant that benefit of Section-80 of the finance Act 1994 is available to them as they had financial hardships as a reasonable cause for non/payment of tax. It is .....

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