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M/s BSL Ltd. Versus C.C.E., Jaipur-II

2016 (6) TMI 74 - CESTAT NEW DELHI

Waiver of penalty under Section 76 of the Finance Act, 1994 - Demand of Service tax and imposition of penalty under Section 76,77 and 78 - Business Auxiliary Service - Reverse charge mechanism - Commission paid to overseas agents - Waiver of penalty is pleaded as the penalty under Section 78 ibid has been imposed and for an option to pay 25% (reduced) mandatory penalty under Section 78 ibid as the option was not given at the lower levels. - Held that:- by following the law laid down by the G .....

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/2010-CU[DB] - Final Order No.51825/2016 - Dated:- 5-5-2016 - S.K. Mohanty Member (Judicial) and R.K. Singh Member (Technical) For Appellant : Mr. Kumar Vikram, Advocate Ms. Surabhi Sinha, Advocate For Respondent : Ms. Suchitra Sharma, DR ORDER Appeal has been filed against Order-in Appeal dated 29.10.2009 which upheld the Order-in-Original dated 13.02.2009, in terms of which service tax demand of ₹ 7,93,750/- was confirmed along with interest on the ground that the appellant paid commissi .....

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ed and option to pay reduced mandatory penalty under Section 78 ibid should be given (as it had not been given by lower authorities) as was done in the above-referred CESTAT order. 3. Ld. Departmental Representative pleaded that during the relevant period, penalty under Section 76 and Section 78 ibid were imposable simultaneously. He also pleaded that in the case of Pr. CST-II Vs. Top Security Ltd. [2015-TIOL-2751-HC-DEL-ST], Delhi High Court has held that option to pay 25% (reduced) mandatory p .....

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reduced (25%) mandatory penalty under Section 78, CESTAT in the appellant s own case vide order dated 11.09.2015 (supra) held as under : - We have considered the contentions of the appellant. There is no doubt that the commission paid to overseas agents by the appellant was liable to service tax under BAS and the appellant is not contesting the same. However, regarding the contention of the appellant that it should not have been imposed penalty under Section 76 ibid, we find that in the case of .....

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2010-874-HC-P&H-ST) has held that even if at the relevant time the penalties under Section 76 & 78 were not mutually exclusive, one penalty under Section 78 has been imposed, penalty under Section 76 ibid may not be justified. We also have no difficulty in agreeing with the appellants that maximum penalty under Section 77 was only ₹ 1000/-. In the light of the said judicial pronouncement, we are inclined to accept the contention of the appellant with regard to the penalty under Sec .....

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is juncture, it is pertinent to mention that the appellant is located in Rajasthan, which is neither under the jurisdiction of Gujarat High Court nor under the jurisdiction of Delhi High Court. Therefore, notwithstanding the judgement of Delhi High Court in the case of Pr. CST-II Vs. Top Security Ltd. (supra), we would have been inclined to follow the judgement of Gujarat High court in the case of Ratnamani Metals & Tubes (supra) more so because it has already been followed in respect of a s .....

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shree Dyg. & Ptg. Mills (P) Ltd. [2014 (305) ELT 442 (Guj) passed by Gujarat high Court after the judgement in the case of Ratnamani Metals & Tubes (supra). Gujarat High Court itself changed its view and in effect held a view similar to that held by Delhi high Court in the case of Pr. CST-II Vs. Top Security Ltd. (supra) Review petition against the said judgement was dismissed by the Supreme Court as reported in ELT quoted below :- Penalty - Tribunal not justify in extending benefit of r .....

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