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2015 (11) TMI 52 - CESTAT MUMBAI

2015 (11) TMI 52 - CESTAT MUMBAI - 2016 (42) S.T.R. 191 (Tri. - Mumbai) - Penalty u/s 78 - Adjustment of excess payment of service tax with penalty - Whether the adjudicating authority holding imposition of penalty of 25% of the penalty (50% of service tax amount) is correct and legal - Held that:- in the adjudication order the adjudicating authority has by mistake stated that 25% of the penalty (50% of the Service tax amount) whereas it is observed that there is no such provision under any stat .....

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found to be paid in excess. In view of the above position, I agree with the contention of the Ld. Counsel that the assessee has paid excess amount in to as compared to total amount required to be paid as per the revenue. Therefore, I do not find any reason to demand any further amount form the assessee. - Appeal disposed of. - APPEAL NO. ST/87881, 88125/13 - Final Order Nos. A/2188-2189/2015-WZB/SMB - Dated:- 16-7-2015 - Mr. Ramesh Nair, Member (Judicial) For the Petitioner : Shri V.M. Chavda, .....

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der: * Imposition of penalty equal to 50% of the Service Tax amount not paid, i.e. penalty of ₹ 12,60,201/- under Section 78 of the Act is upheld. Further, as per second proviso to Section 78(1) of the Act, the Respondent was eligible for paying penalty equal to 25% of the Service Tax amount confirmed i.e. 25% of ₹ 25,20,402/- which comes to ₹ 6,30,100/- if the same was paid within 30 days from the date of communication of the Order-in-Original alongwith service tax and interes .....

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ng taxable service under the manpower recruitment service and holding service tax registration w.e.f. 4/7/2005. It was noticed by the department that assessee was evading payment of service tax on the services provided during the period from July, 2005 onwards; therefore investigation was carried out which revealed that appellant is charging and recovering service tax from their client. It was noticed that they had not deposited service tax collected from their client to the government account. .....

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uthority adjudicated the show cause notice vide order-in-original, wherein inter alia confirmed the demand of service of ₹ 25,20,402/- under Section 73 of the Act; ordered appropriation of ₹ 19,34,173/- already paid by the Respondent against the said confirmed demand, also ordered recovery of interest under Section 75 and appropriated ₹ 34,687/- against interest already paid. Penalty of ₹ 5,000/- under Section 77 of the Act and penalty of ₹ 12,60,201/- under Section .....

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on the ground that all the transaction of the assessee recorded in their books of account. Ld. Commissioner (Appeals) should not have given this benefit for the reason that period involved in the transaction is prior to amendment of Section 78 benefit of 50% penalty could not have been extended for period which is prior to amendment of Section 78. According to the Revenue Addl. Commissioner should have imposed of equal amount of penalty on the assessee under the unamended Section 78 of the Act, .....

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- which comes to ₹ 6,30,100/- within 30 days from the date of communication of the order-in-original, then the assessee is eligible for paying penalty of equal amount to 25% of service tax amount confirmed. In the order it was also held that since the assessee has paid penalty only ₹ 3,15,050/- out of the said reduced penalty of ₹ 6,30,100/- payable by him at the time and period of 30 days prescribed under the third proviso to Section 78(1) of the Act is already over, the asses .....

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available to the assessee on the ground that period of non payment is prior to amendment in Section 78 and as per Section 38A of Central Excise Act there is no saving clause and according to which the option under unamended Section 78 can be given effect subsequent to the amendment under Section 78. Accordingly old Section 78 shall apply wherein 50% immunity from penalty was not provided. In the assessees appeal ground was taken that in the order-in-original the adjudicating authority as held .....

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d Section after amendment in Section 78. As per Section 38A of Central Excise Act, the saving was provided only in respect of rules notification and order etc and not to the act, therefore unamended Section 78 cannot be made applicable while adjudicating the case at the time after the amendment in Section 78, therefore unamended section shall be applicable. He further submits that as regard the adjudication order the adjudicating authority has ordered for penalty equal to 25% of the penalty impo .....

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nded penalty equal to 25% of penalty (50% of the Service tax) and not 25% of the service tax. Therefore the order passed by the adjudicating authority wherein it was ordered that assessee is required to pay 25% of the penalty (50% of the Service tax) attained finality. Therefore the Revenue should not have raised this issue in their appeal before this Tribunal. He therefore submits that in these facts, the adjudication order should be upheld and the order of the Commissioner (Appeals) be set asi .....

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ection that is of General Clauses Act. He further submits that in the case of M/s. Vinyl Chemicals India Ltd. & Anr Vs. The State of Maharashtra & Ors. in Writ Petition No. 2772 of 2014 the Hon ble High Court of Bombay vide order dated 28/4/2015 placing reliance on Apex court judgment in the case of Gursharan Singh and Others Vs. New Delhi Municipal Committee & Ors. (1996) 2 SSC 459, he submits that whether rightly or wrongly, original authority in the adjudication order held that as .....

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judice he also submits that even if it is held that the assessee is required to pay 25% of the total service tax amount confirmed within the period of 30 days according to him the service tax paid by them is in excess to service tax required to be paid, which if the same is adjusted against the balance of 25% penalty of the service tax amount then total amount of service tax, interest and 25% penalty shall stand paid. Accordingly even if contention of the Revenue is accepted and even if amended .....

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6,30,100/- then the short fall of pealty shall be 310050 assessee on account of service tax paid an excess amount of ₹ 6,89,278/- which Ld. Counsel requested to adjust against short fall of the penalty amount i.e. ₹ 3,10,050/- with this adjustment the charge of the Revenue shall not sustain and the assessee shall be entitle to the benefit of 25% penalty of the service tax amount as provided even in the amended Section 78 accordingly the order of the Ld. Commissioner (Appeals) not co .....

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penalty. He further submits that as regard the adjudication order as well as the Ld. Commissioner (Appeals) order imposing penalty 50% of the Service tax amount in terms of amended provisions of Section 78, he submits that period of the offence involved is prior to the amendment of Section 78 and therefore even after substitution of Section 78, the action can be taken under the unamended Section 78 for the reason that Section 38 of Central Excise Act provide saving and provision of unamended sec .....

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her adjudicating authority as well as the Commissioner (Appeals) are correct in invoking the amended provision of Section 78 where under the provision 50% penalty is provided. (3) Whether the assesee s alternative submission that they have paid excess amount of service tax and if the same is considered as payment against short fall of interest and even penalty at 25% of Service tax is held to be correct, whether, the same can be allowed. I find that in the adjudication order the adjudicating aut .....

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of - 4 Substituted (w.e.f. 8.04.2011) by s.74 of the Finance Act, 2011(8 of 2011) (a) fraud; or (b) collusion; or (c) wilful mis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax, the person, liable to pay such service tax or erroneous refund, as determined under sub-section (2) of section 73, shall also be liable to pay a penalty, in addition to such service tax and in .....

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ithin thirty days from the date of communication of order of the Central Excise Officer determining such service tax, the amount of penalty liable to be paid by such person under the first proviso shall be twenty-five per cent. of such service tax: Provided also that the benefit of reduced penalty under the second proviso shall be available only if the amount of penalty so determined has also been paid within the period of thirty days referred to in that proviso: Provided also that in case of a .....

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