Simultaneous imposition of penalties under section 76 and 78 of the Finance Act.

PJ/CASE LAW/13-14/2073

Case:- SURYA CONSULTANTS VERSUS COMMISSIONER OF CENTRAL EXCISE,JAIPUR-I

Citation:-2013 (32) S.T.R. 217 (Tri.-Del.)

Brief facts:-The original Adjudicating Authority while confirming the demand of service tax and imposing penalty under Sections 77 and 78 of the Finance Act, 1994, did not impose any penalty under Section 76. Revenue challenged the said order before Commissioner (Appeals), who accepted their appeal and imposed penalty under Section 76. Hence, the present appeal by the assessee.

Appellant’s contention:-The appellant submitted that the Hon'ble Punjab & Haryana High Court decision was later in point of time and was also the Jurisdictional High Court of Delhi Benches of the Tribunal. As such, he submitted that the same should be followed. He also drawn attention to another decision of the Tribunal in the case of C.C.E., Haldia v. Mittal Technopack P. Ltd. reported in 2012-TI0L-1507-CESTAT-KOL, wherein Tribunal by taking note of both the decisions of the Hon'ble High Court has followed Hon'ble Punjab & Haryana High Court.

Respondent’s contention:-The Respondent referred to Hon’ble Kerala High Court decision in the case of Assistant Commissioner of Central Excise v. Krishna Podtwatreported in 2006 (1) S.T.R. 185 (Ker.)laying down that incidence of imposition of penalties under the two sections were distinguish and separate. It was also included that if offences had been committed in courses of same transaction or arose out of same act, separate penalties were imposable for ingredients of both the offences.

Reasoning of Judgment:- After hearing both the sides, it was the submission of the CESTAT that the Hon'ble Punjab & Haryana High Court in the case of C.C.E. v. First Flight Courier Ltd.reported in 2011 (22) S.T.R. 622 (P&H) had held that imposition of penalty under Sections 76 and 78 of the Finance Act, 1994, prior to 10-5-2008 amounted to double jeopardy and if penalty had been imposed under Section 78, separate imposition of penalty under Section 76 is not justified. They also explained that Delhi Benches fell under the jurisdiction of Punjab & Haryana High Court and as such, were bound by the declaration of the law by the said High Court and also in view of fact that, that the tribunal had been Punjab & Haryana High Court decision is later in point of time, and that both the decision stand discussed by the decision of C.C.E., Haldia v. Mittal Technopack P. Ltd. (supra), they were by the respectfully following said decision of the Punjab & Haryana High Court, set aside the impugned order of Commissioner (Appeals) as regards imposition of penalty under Section 76 of the Finance Act and allowed the appeal with consequential relief to the appellant. Stay petition as also appeal get disposed of in above manner.

Decision:-Appeal allowed.

Comment:- The gist of this case is that simultaneous imposition of penalties under section 76 & 78 of the Finance Act is not at warranted in view of the Punjab & Haryana High Court decision in the case of First Flight Courier Ltd. Moreover, as the Delhi falls within the jurisdiction of the Punjab & Haryana High Court, the decision will have binding precedent instead of following the decision given by the Kerala High Court.

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PJ/CASE LAW/13-14/2073

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