Case Law Details
Sos Finance Vs C.S.T. Service Tax (CESTAT Ahmedabad)
Limited issue to be decided in the present case is that whether the appellants are liable for penalty under Section 76 & 78 of the Finance Act, 1994. As regard, the imposition of penalty under Section 76 in the present case, I find the issue is settled by various High Court judgments in the following case:-
- RAVAL TRADING- 2016 (42) STR 210 (Guj.)
- Delhi High Court in the case of Bajaj Travels Limited Commissioner of Service Tax [2012 (25) S.T.R. 417 (Del.)]
- Karnataka High Court in the case of Commissioner of Service Tax, Bangalore Motor World [2012 (27) S.T.R. 225 (Kar.)]
- Punjab and Haryana High Court in the case of Commissioner of Central Excise First Flight Courier Limited [2011 (22) S.T.R. 622 (P&H)
In view of the above judgments simultaneous penalty under Section 76 cannot be imposed when penalty under Section 78 is imposed. For this reason, the penalty imposed under Section 76 is not sustainable, hence, the same is set aside. As regard, the penalty under Section 78, I find that the adjudicating authority even though invoked the extended period but by invoking Section 80 set aside the penalty by considering the fact that the appellant had admittedly paid the entire service tax along with interest before issuance of show cause notice. I have further found that the non payment of service tax was detected only during audit of the appellant’s books of accounts, therefore, the transaction on which the service tax demanded were very much entered in the books of the appellant’s account. Therefore, considering the overall fact and circumstances of this case, I am of the considered view that the adjudicating authority has rightly set aside the penalty under Section 76 & 78 of the Finance Act, 1994. Therefore, I do not find any infirmity in the order of the adjudicating authority. For this reason the order of the Commissioner (Appeals) is not proper and correct, hence, the same is not sustainable.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
In the present appeal the appellant have challenged the imposition of penalties under Section 76 & 78 on the ground that since the service tax along with interest had already been paid the case should have been closed and no penalty could have been imposed.
2. Shri. Jigar Shah, learned Counsel appearing on behalf of the appellant submits that the adjudicating authority had rightly dropped the penalty under Section 76 & 78 invoking Section 80 of the Finance Act, 1994, therefore, the Learned Commissioner (Appeals) has erred in imposing penalty. He submits that the Learned Commissioner (Appeals) has imposed penalty on the ground that since there was suppression of fact and extended period was invoked, the penalty under both the sections were imposable. He submits that despite the extended period was invoked but it is provided under Section 80 the Finance Act that in the facts and circumstances of the case the penalty can be set aside, hence, there is no error in the order of the original authority. Hence, the learned Commissioner (Appeals) has erred in imposing penalty. He alternatively submits that the case of the appellant is otherwise covered under Section 73 (3) of Finance Act 1994 which has been admitted by the adjudicating authority. According to which no show cause notice should have been issued since the appellant had paid the duty and interest before issuance of show cause notice. Without prejudice, he further submits that as regard penalty under Section 76 the same cannot be imposed once penalty under Section 78 was imposed as held in various judgments. In support of his arguments, he placed reliance on the following judgments:-
- M/S. POPULAR VEHICLES & SERVICES LTD-2010-TIOL-776-CESTAT-BANG
- WEST MINISTER INTERNATIONAL (P.) LTD-11STT 157 (NEW –CEGAT) FILCO TOURS-2006 (1) STR 269 (TRI- DEL.)
- UNITED COMMUNICATION, UDUPI-2011-TIOL-802-HC-KAR-ST
- PROMPT SERVICES-2011 (23) STR 523 (TRI-KOLKATA)
- SAFE TEST ENTERPRISES-(2010) 24 STT 377 (CHENNAI-CESTAT)
- SRIRAM & CO.-(2010)24 STT 378 (CHENNAI-CESTAT)
- ANAND AGENCIES-(2010) 24STT 462 (CHENNAI-CESTAT)
- CCE V. PLANNERS INDIA (P.) LTD-(2007)8 STT 129 (NEW DELHI-CESTAT)
3. G. Kirupanandan, learned Superintendent (AR) appearing on behalf of the revenue reiterates the finding of the impugned order.
4. I have carefully considered the submission made by both the sides and perused the records. I find that the limited issue to be decided in the present case is that whether the appellants are liable for penalty under Section 76 & 78 of the Finance Act, 1994. As regard, the imposition of penalty under Section 76 in the present case, I find the issue is settled by various High Court judgments in the following case:-
- RAVAL TRADING- 2016 (42) STR 210 (Guj.)
- Delhi High Court in the case of Bajaj Travels Limited Commissioner of Service Tax [2012 (25) S.T.R. 417 (Del.)]
- Karnataka High Court in the case of Commissioner of Service Tax, Bangalore Motor World [2012 (27) S.T.R. 225 (Kar.)]
- Punjab and Haryana High Court in the case of Commissioner of Central Excise First Flight Courier Limited [2011 (22) S.T.R. 622 (P&H)
4.1 In view of the above judgments simultaneous penalty under Section 76 cannot be imposed when penalty under Section 78 is imposed. For this reason, the penalty imposed under Section 76 is not sustainable, hence, the same is set aside. As regard, the penalty under Section 78, I find that the adjudicating authority even though invoked the extended period but by invoking Section 80 set aside the penalty by considering the fact that the appellant had admittedly paid the entire service tax along with interest before issuance of show cause notice. I have further found that the non payment of service tax was detected only during audit of the appellant’s books of accounts, therefore, the transaction on which the service tax demanded were very much entered in the books of the appellant’s account. Therefore, considering the overall fact and circumstances of this case, I am of the considered view that the adjudicating authority has rightly set aside the penalty under Section 76 & 78 of the Finance Act, 1994. Therefore, I do not find any infirmity in the order of the adjudicating authority. For this reason the order of the Commissioner (Appeals) is not proper and correct, hence, the same is not sustainable.
5. Accordingly, I set aside the impugned order and allow the appeal with consequential relief.
(Pronounced in the open court on 08.02.2023)
