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M/s Creative Tours & Travels Pvt. Ltd. Versus Commissioner of Service Tax, Mumbai

2015 (11) TMI 904 - CESTAT MUMBAI

Benefit of Section 80 - Imposition of penalty - Validity of review order - whether the Reviewing authority could have reviewed the order of the adjudicating authority for use of discretionary power under Section 80 of the Finance Act, 1994 for dropping the proceedings initiated for imposition of penalties - Held that:- Adjudicating authority has exercised his discretionary power under Section 80 for dropping the proceedings to impose the penalty with a reasoned order. The reasoning given by the .....

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C/SJS/07-08 dated 18.1.2008 passed by the Commissioner of Service Tax, Mumbai. 2. The relevant facts that arise for consideration are the appellant herein has registered with the authorities as Air Travel Agency and discharged the Service Tax liability. Officers of the DGCEI visited the premises and on thorough investigation came to conclusion that the appellant had not properly discharged the Service Tax liability and was involved in evasion of Service Tax. After recording various statements, t .....

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avy bad debt, due to which they are unable to discharge Service Tax liability. In support of which they produced their Bank Statement and over draft facilities with the Bank. Adjudicating authority after following the due process of law confirmed the Service Tax liability along with interest and appropriated the amounts paid. Considering the situation of the appellant, the adjudicating authority exercised the power granted under Section 80 of the Finance Act, 1994 and dropped the proceedings ini .....

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alties under Section 76 and 78 of the Finance Act, 1994 needs to be imposed and did so by the impugned order before us. 3. Learned Counsel would submit that the Reviewing authority has wrongly exercised the provisions of section 84 of the Finance Act, 1994. He would draw our attention to the Order-in-Original and submit that the adjudicating authority had recorded clearly that there was no modus operandi or mens rea on part of the appellant for non-discharging Service Tax liability due to severe .....

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alled in question. He would also submit that the judgment of the Hon'ble High Court of Karnataka in the case of Commissioner of Service Tax Vs. Handimann Services Ltd. 2011 (24)STR 641 (Kar) is also on the very same point and also the proposition. In the case of Commissioner of Central Excise, Jalandhar Vs. Darmania Telecom 2009 (14) STR 145 (P&H), the same proposition has been accepted by the Hon'ble High Court. 4. The learned DR submits that the case was detected by the agency afte .....

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erest for the period in question. In this appeal, only point that falls for our consideration is whether the Reviewing authority could have reviewed the order of the adjudicating authority for use of discretionary power under Section 80 of the Finance Act, 1994 for dropping the proceedings initiated for imposition of penalties. 5.2 On perusal of the Order-in-Original passed by the adjudicating authority, we find that in para 4.3, 4.4, 4.5 and 4.6, the adjudicating authority has given the detaile .....

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for imposing penalties on the appellant. First and foremost, we find that the adjudicating authority has exercised his discretionary power under Section 80 for dropping the proceedings to impose the penalty with a reasoned order. The reasoning given by the adjudicating authority are acceptable justification for non-imposition of penalties. We find strong force in the contentions raised by the learned Counsel that the Hon'ble High Court of Karnataka in the case of Handimann (supra) has settle .....

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al. The Tribunal, following the judgment of this court in the case of C.C.E. v. Sunitha Shetty - 2004 (174) E.L.T. 313 (Kar.) = 2006 (3) S.T.R. 404 (Kar.) and also the judgment of the Tribunal in M/s. Majestic Mobikes (P) Ltd. v. C.C.E. [2008 (11) S.T.R. 609 (Tri.)] held that the Commissioner was not justified in exercising his suo motu powers to interfere with a discretionary order passed by the original authority where he was satisfied with the cause shown and he had not imposed penalty. Aggri .....

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and impose penalty in pursuance of his revisional jurisdiction. The Tribunal was justified in interfering with the said order and setting aside the same. 5.4 We also find that the Hon'ble High Court of Punjab & Haryana in the case of Darmania Telecom (supra) on the same issue has held as under: - 2. The order-in-original was passed by the Assistant Commissioner on 15-6-2005 (A-1) and penalty of ₹ 1,000/- under Sections 76 and 78 of the Act was imposed by exercising power vested in .....

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