Benefit of reduced penalty u/s. 78 of 25% under 4th proviso is not admissible if tax amount is reduced by Commissioner (A)

In this case, the Commissioner (Appeals) has reduced the tax amount and hence the respondents cannot take advantage of the provision under the fourth proviso to Section 78. Having not paid the penalty amount within one month from the date of the Order-in-Original even though the legal provision was clearly brought to the notice of the respondents by the original authority in para 14 of his order, the respondents cannot be given the benefit of paying 25% of the reduced penalty.

Hence the impugned order passed by the lower appellate authority is modified to that extent and it is held that the respondents are required to pay penalty of Rs.40,692/- (Rupees forty thousand six hundred ninety two only) equal to the reduced tax amount determined by the lower appellate authority. The Department’s appeal is allowed in the above terms.

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI

Appeal No. ST/458/2010

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