Whether penalty can be imposed under Section 76 of the Finance Act, apart from imposition of penalty of equal amount under Section 78.

PJ/CASE LAW/2014-15/2479

Case:-COMMISSIONER OF CENTRAL EXCISE, AURANGABAD Vs SATISH NAGARE

Citation:-2014-TIOL-2078-CESTAT-MUM

Brief fact:-The Revenue filed this appeal against the impugned order for imposition of penalty under Section 76 of the Finance Act. The facts of the case are that the respondent has provided the service of business auxiliary, which involved the service tax of Rs.1,39,847/-. The same stood paid along with interest by the respondent and the same is not under dispute.

Appellant’s contention:-The learned AR submits that the entire service tax amount was not paid prior to issue of show cause notice. Therefore, a penalty should have been imposed under Section 76 of the Finance Act, apart from imposition of penalty of equal amount under Section 78 which is upheld by the learned Commissioner (Appeals).

Respondent’s contention:-None appeared for the respondent.

Reasoning of judgment:-The Hon’ble Tribunal find that equal amount of penalty under Section 78 of the Finance Act has been imposed and the learned Commissioner (Appeals) has dropped the penalty under Section 76 on the ground that once penalty under Section 78 is imposed, penalty under Section 76 is not justified, as held by the Hon'ble Punjab & Haryana High Court in the case of CCE vs. First Flight Courier Ltd. reported in = 2011-TIOL-67-HC-P&H-ST, wherein the Hon'ble High Court held as under:-
"Section 76 provides for penalty for failure to pay the amount while Section 78 provides for penalty for suppressing the taxable value. Section 78 is, thus, morecomprehensive and provides for higher amount. Even if technically, the scope of sections 76 and 78 is different, penalty under Section 76 may not be justified if penalty had already been imposed under Section 78."
From the above findings, it appears that the Commissioner (Appeals) has rightly waived the penalty under Section 76 in the light of the decision of the Hon'ble Punjab & Haryana High court cited supra. Hence they do not find any infirmity in the impugned order. The appeal of the Revenue is dismissed.

Decision:-Appeal dismissed

Comment:-The analogy of the case is that according to decision of Hon'ble Punjab & Haryana High court the scope of section 76 and 78 is different, penalty under section 76 may not be justified if penalty had already imposed under section 78. Section 78 also provided that if the penalty is payable under this section, the provisions of section 76 shall not apply. Hence, penalty cannot be imposed under section 76.

Prepared by:- Monika Tak

Comments

PJ/CASE LAW/2014-15/2479

Post a Comment

Query