TMI Blog2016 (1) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... ), Central Excise, Mumbai Zone-1, wherein the Ld. Commissioner upheld the Order-in-Original No. 56/2008 dtd. 10/11/2008 and accordingly rejected the appeal filed by the appellant. 2. The fact of the case is that the appellants are engaged in providing the services of Security Agency and for which they hold Service Tax registration under Section 69 of the Finance Act, 1994. During the scrutiny of records at the time of Audit, it was observed that the proprietary concerns of the appellant were not paying service tax on the service charges towards Security Service which were deposited in his bank account and reflected in their P L account. Therefore, a Show Cause Notice dated 20/04/2004 had been issued to the appellant proposing the demand of service tax amounting to ₹ 12,59,510/- for the period 16/10/1998 to 31/12/2003. The demand proposed in the Show Cause Notice was confirmed by the Adjudicating Authority vide Adjudication Order dated 10/11/2008. In addition the Adjudicating Authority also demanded the interest under Section 75 and imposed the penalty under Section 76, a penalty of ₹ 500/- under Section 75A and a penalty of ₹ 6,25,118/- under Section 78 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in view of above judgments, it particular in the case Commr. of Cen. Ex. Vs. Bajaj Travels Limited (supra) passed by Hon ble High Court of Punjab Haryana which has been upheld by the Hon ble Supreme Court by dismissing Revenue s appeal, the appellant is entitled for reduction of penalty to the extent of 75% in terms of first proviso to Section 78. 4. On the other hand, Shri B.K. Iyer, Ld. Supdt. (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that as regard the penalties under Section 76 78, this Tribunal has passed a judgment in the case of Board Of Control For Cricket In India Vs. Commr. of S.T., Mumbai-I - 2015 (37) S.T.R. 785 (Tri.-Mum.), according to which the penalty under section 76 as well as 78 can be imposed simultaneously. As regard the issue whether the option to pay 25% penalty in terms of proviso to Section 78 can be allowed after 30 days of adjudication order, the Hon ble High Court of Bombay in the case of CCE, Raigad Vs. Castrol India Limited - 2012 (286) E.L.T. 194 (Bom.), it was held that the period of 30 days provided under the proviso to Section 11AC of Central Excise Act, cannot be extended accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es are committed in the course of same transaction or arises out of the same act, the penalty is imposable for ingredients of both the offences. There can be a situation where even without suppressing value of taxable service, the personal liable to pay service tax fails to pay. Therefore, penalty can certainly be imposed on erring persons under both the above sections, especially since the ingredients of the two offences are distinct and separate. Perhaps invoking powers under Section 80 of the Finance Act, the appropriate authority could have decided not to impose penalty on the assessee if the assessee proved that there was reasonable cause for the said failure in respect of one or both the offences. However, no circumstances are either pleased or proved for invocation of the said Section also. In any event, we are not satisfied that an assessee who is guilty of suppression deserves such sympathy. As such, we are of opinion that the learned single Judge was not correct in directing the 1st appellant to modify the demand withdrawing penalty under Sec 76. Therefore, the judgment of the learned Single Judge, to the extent it directs the first appellant to modify Ext. P1 by withdraw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t may be different, as submitted on behalf of the revenue, the fact that penalty has been levied under Sec 78 could be taken into account for levying or not levying penalty under Sec 76 of the Act. In such situation even if reasoning given by the appellate authority that if penalty under Sec 78 of the Act was imposed, penalty under Sec 76 of the Act could never be imposed may not be correct, the appellate authority was within its jurisdiction not to levy penalty under Sec 76 of the Act having regard to the fact that penalty equal to service tax had already been imposed under Sec 78 of the Act. This thinking was also in consonance with the amendment now incorporated though the said amendment may not have been applicable at the relevant time. Moreover, the amount involved in ₹ 51026/- only. Commr. of C. Ex. Vs. First Flight Courier Ltd.- 2011 (22) STR 622 (P H) 4. Only point which has been urged by learned counsel for the appellant is that after 10-5-2008, there is an amendment providing that penalty under Sec 78 has been levied but for the period prior thereon, penalty could be levied under both Sections. The Commr. (Appeals) as well as the Tribunal erred in dele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that adjudicating authority did not impose penalty and therefore, the assessee did not get an opportunity to deposit 25% of the penalty, within one month. United Communication Udupi Vs Commr of C.Ex, Mangalore-III - 2012 (281) ELT 168 (Kar.) In para 5. At the same time it is now well settled that the liability cannot be imposed both under Sections 76 and 78. Therefore, in this case the liability to pay penalty is only under Sec 78. In fact the proviso to Sec 78 makes it very clear that if penalty is payable under this Section, the proviso to Sec 76 shall not apply. Thereby no penalty could be imposed both under Sections 76 as well as 78. therefore, in this case the penalty is to be construed under Sec 78. To that extent the appeal succeeds. Commr. of C. Ex., Bhopal Vs. M/s. Hemkunt Petroleum Ltd. - 2015-TIOL-922-CESTAT-DEL 2. We have considered the contentions of Revenue. There is no dispute about the fact that the penalties under Sections 76 and 78 of the Act, became mutually exclusively only with effect from 16-5-2008 when proviso was added to Section 78 to the effect that if the penalty was payable under Sec 78 provisions of Sec 76 shall not apply. That h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arious High Courts as stated above, the view taken by the Karnataka, Punjab Haryana High Courts shall prevail, accordingly, following of the ratio of those judgments, I am of the view that penalty under Sec 76 is not sustainable; hence the same is set aside. 7. As regard the second issue whether the appellant can be permitted 25% penalty in terms of proviso to Sec 78, I find that though there are confecting views of Hon ble Bombay High Court and Punjab Haryana High Court in the case of Castrol India Ltd. (supra) and Bajaj Travel Ltd. (supra) respectively, the case of Bajaj Travel Ltd. (supra) has been upheld by the Hon ble Supreme Court vide judgment dated 25-11-2011 in civil appeal No. 19006/2011 which is reproduced below: ORDER Delay condoned. Having regard to the facts of the case and bearing in mind the fact that the tax and interest amount had been deposited by the respondent even before the order of adjudication was passed, no ground is made out for our interference with the impugned judgment in exercise of our jurisdiction under Article 136 of the Constitution of India. The Special leave Petition is dismissed accordingly. Therefore, respectfully ..... X X X X Extracts X X X X X X X X Extracts X X X X
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