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2016 (2) TMI 72 - CESTAT KOLKATA

2016 (2) TMI 72 - CESTAT KOLKATA - TMI - Simultaneous penalty u/s 76 and 78 - Option of pay reduced penalty @25% - While deciding the issue Adjudicating authority did not impose Sec 76 penalty and also did not give the option of 25% reduced penalty under Sec 78 of the Finance Act 1994 to the appellant - Commissioner of Central Excise, Bolpur also reviewed OIO dt 28/8/2008 & imposed Sec 76 penalty in addition to penalty u/s 78 - Held that:- in the present proceedings simultaneous imposition of pe .....

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ne month from the date of receipt of this order. - Decided partly in favor of assessee. - Appeal No. ST/460/2012 & ST/257/2009 - Final Order Nos. A/75662-75663/2015 - Dated:- 20-11-2015 - H K Thakur, Member (T) For the Appellant : Shri S Banerjee, Adv For the Respondent : Shri K Choudhary, Supdt (AR) ORDER Per H K Thakur These appeals have been filed by the appellants against OIA No. 160/BOL/2012 dt 01/06/2012 passed by Commissioner (Appeals) Kolkata-IV and order-in-Revision No. 76/Commr./55-Rev .....

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1994 for which order-in-Revision dt 04/09/2009 was passed by the Commissioner. 2 Sh. S. Banergee (Advocate) appearing on behalf of the appellant argued that passing of order-in-Revision dt 4/9/2009 by the Jurisdictional Commissioner was wrong when an appeal on the same issue was pending before Commissioner (A) as per Sec 84 (4) of the Finance Act 1994 pevailing at the relevant time. He relied upon the case law of CCE Vs Shiva Builders [2011 (22) STR 513 (P&H)]. It was also his case that no o .....

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ies Vs CESTAT [2014 (306) ELT 302 (Guj)]. On Simultaneous imposition of penalties under Sec 76 & 78 of the Finance Act 1994 at the relevant time Learned AR relied upon the case law of Bajaj Travels Ltd Vs CS1 [2012 (25) STR 417 (Del)]. 4. Heard both sides & perused the case records. Appellant M/s. Teknomac Engineers were providing Maintenance & Repair service during the period 1/7/2003 to 31/3/2006. Appellant submitted ST-3 return for the period 1/7/2004 to 31/3/2006 & did not su .....

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peal against OIO dt 28/8/2008 before Commissioner (A). As the order in Review dt 4/9/2009 was passed when appeal filed by the appellant was pending before Commissioner (A). It is the case of appellant that as per the provision of Sec 84(4) of the Finance Act 1994 existing at the relevant time no Review of OIO could be done when an appeal on the same issue is pending before Com (A). Learned Advocate relied upon the case law of CCE Vs Shiva Builders (Supra)whereas Learned AR relied upon the case o .....

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#39;s challenge to the penalty imposed by the adjudicating authority. Revenue can file appeal before the Commissioner seeking enhancement of the penalty? (ii) Whether once the Commissioner rejects assessee's appeal against penalty, the Revenue's appeal for enhancement would be barred since the order of adjudicating authority would have merged in the order of the Commissioner rejecting appeal of the assessee?" 5. Hon'ble Gujarat High Court in the above case law passed following o .....

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er passed by the adjudicating authority would not be barred on the ground of merger and consequently would be maintainable, meaning thereby the Revenue cannot be said to be debarred from challenging the order passed by the adjudicating authority with respect to the quantum of penalty which was neither the subject matter of appeal before the Appellate Commissioner nor there was any Its between the parties in the said appeal preferred by the assessee nor the Appellate Commissioner had any occasion .....

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bserved that in the present proceeding show cause notice has been issued prior to 16/5/2008. Hon'ble Delhi High court in the case of Bajaj Travels Ltd Vs CST [2012 (25) STR (417) (Delhi)] held as follows:- "13. We have given our due considerations to the aforesaid submissions made by the learned counsel for both the parties. The service tax was introduced by the Finance Act, 1994 and the relevant provisions are contained in Chapter-V of the said Act, Section 66 is the charging Section a .....

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6 and 70 of the Act. we reproduce these two Sections hereunder- "76. Penalty for failure to pay service tax - Any person, liable to pay service tax in accordance with the provisions of Section 68 or the rules made under this Chapter, who fails to pay such tax. shall pay, in addition to such tax and the interest on thai tax amount in accordance with the provisions of Section 75, a penalty which shall not be less than two hundred rupees for every day during which such failure continues or at .....

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on of - (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 interest thereon, if any, payable by him, which shall not be less than, but .....

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cent of the service tax so determined: Provided further that the benefit of reduced penalty under the first 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 where the service tax determined to be payable is reduced or increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the Court, then for the purposes of this section, the service tax as re .....

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ys of communication of the order by which such increase in service tax takes effect." A perusal of the provisions would show that Section 76 provides for penalty for failure to pay service tax. In such a case, in addition to the tax and interest on that tax amount to be calculated in accordance with the provision of Section 75, penalty is also leviable on the defaulter which shall not be less than ₹ 200 for every day during which such failure continues or at the rate of two per cent o .....

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circumstances stipulated therein which are fraud or collusion or wilful mis-statement or suppression of facts or contravention of any of the provisions of this Chapter or of the rules made thereunder. Such fraud, collusion etc. has to be with intent to evade payment of service tax Thus, provision of Section 78 are attracted when not only a case of fraud, collusion etc is made out but it is also established that the defaulter did not pay or short-paid or got refund of the tax paid with intent to .....

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ays from the date of communication of the order, this penalty is to be reduced to 25% of the service tax so determined. 15. By their very nature, Sections 76 and 78 of the Act operate in two different fields. In the case of Assistant Commissioner of Central Excise v Krishna Poduval -(2005) 199 CTR 58 = 2006 (1)S.T.R. 185 (Ker.) the Kerala High Court has categorically held that instances of imposition of penalty under Section 76 and 78 of the Act are distinct and separate under two provisions and .....

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this amendment the legal position now is that simultaneous penalties under both Section 76 and 78 of the Act would not be levied. However, since this amendment has come into force w.e.f. 16th May, 2008. it cannot have retrospective operation in the absence of any specific stipulation to this effect. Going by the nature of the amendment, it also cannot be said that this amendment is only clarificatory in nature. We may mention that Punjab and Haryana High Court in its decision dated 12th July, 20 .....

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ct, when the larger penalty had already been imposed under Section 78 of the Act. In this scenario, the appeal of the Revenue against the said view taken by the appellate authority was dismissed holding that "appellate authority was within its jurisdiction not to levy the penalty under Section 76 of the Act having regard to the fact that penalty equal to service tax had already been imposed under Section 78 of the Act. This thinking was also in consonance with the amendment now incorporated .....

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