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Corporate News *  Service tax penalty can’t survive when assessee acted on dept.’s own view of non-taxability: Delhi High Court. *  GST section 74 extended limitation questionable when form 26AS mismatch was already known: Karnataka High Court grants interim relief. *  CGST demand prima facie impermissible after state GST settlement under section 128A: Bombay High Court. *  Supreme Court asks GSTAT to sympathetically consider delay as taxpayers pursued remedy before wrong forum. *  Supreme Court stays Tripura High Court ruling protecting genuine buyers from ITC denial over supplier’s GST default. *  Diary entries alone can’t prove clandestine removal of goods: CESTAT quashes excise penalty on steel trader. *  Customs could investigate preferential tariff claims even before sec. 28DA: Delhi High Court. *  Customs dept. relied on fake AI generated case laws: supreme court quashes Rs. 425.28 crore penalty. *  No GST exemption in affiliation and annual registration charges for admission or conduct Of examinations: GSTAT. *  Mere invoices, cheque payments insufficient to establish genuine movement of goods: GSTAT restores Rs. 43.44 lakh ITC demand. *  Consolidated GST show cause notice covering multiple financial years is not without jurisdiction: Delhi High Court. *  Construction of independent houses on separate plots not taxable as ‘Residential Complex’ without common facilities: CESTAT. *  GST penalty exceeding statutory maximum unsustainable; Allahabad High Court quashes ? 50,000/- penalty after taxpayer filed return and paid late fee. *  GST order against standard chartered bank passed without hearing set aside by Bombay High Court. *  Retracted statements can’t be relied upon without cross-examination: CESTAT quashes gold confiscation. *  Burden to prove misclassification lies on customs department: CESTAT. *  CESTAT quashes Rs. 98 lakh excise demand on clearance of used refractory brick scrap. *  Service tax demand on irrigation works quashed: Karnataka High Court rules sale of goods component not taxable as service. *  GSTAT restores tax and penalty for transporting iron scrap without E-way bill citing intent to evade tax. *  Madras High Court stays GST recovery from directors without opportunity to show cause under section 89. *  Madras high court stays GST recovery notice against directors; finds prima facie case on applicability of section 79(1)(c). *  Procedural lapses can’t justify harsh punishment without serious customs breach: CESTAT quashes customs broker licence revocation. *  Service tax payable on land leasing and sports complex charges: CESTAT. *  Settled customs dispute can’t be reopened through Article 226 challenge to interest liability: Delhi High Court. *  Mere facilitation of customs clearance can’t establish knowledge of smuggling: Madras High Court. *  GST registration cancellation stayed: Allahabad High Court questions 99% ITC utilisation cap under rule 86B. *  Composition scheme lapses automatically on crossing Rs. 1.5 crore turnover: GSTAT. *  Gujarat High Court quashes GST cancellation orders after officer relied on non-existent AI-generated case laws. *  Importers liable for customs duty benefits availed through manipulated scrips: Delhi High Court. *  Procedural E-way bill lapse alone can’t justify penalty where genuine transaction and absence of tax evasion are established: GSTAT.
Subject News *  Documentary evidence dominates probe, further custody unwarranted: mumbai court grants bail in Rs. 22.44 crore customs duty evasion case. *  Business premises can’t remain sealed for non-participation in GST search: Allahabad High Court. *  GST pre-deposit must be refunded proportionately when taxpayer partly succeeds in appeal: Bombay High Court. *  Supreme Court grants 30 days to file GST appeal; keeps pre-deposit issue open due to deposit in parallel CGST proceedings. *  GST demand can’t exceed amount proposed in SCN: Allahabad High Court quashes Rs. 20.47 Crore order. *  Hundreds-of-crores GST demand and heavy 10% pre-deposit no ground to bypass statutory appeal: Punjab & Haryana High Court. *  Delhi High Court refuses to entertain challenge to gold confiscation due to statutory appeal remedy and unexplained delay. *  Procedural error in customs broker licence inquiry can be rectified through remand: Delhi High Court. *  GSTR-2A mismatch alone can’t justify ITC denial without invoice-wise verification; personal hearing mandatory: GSTAT. *  GST order passed without uploading personal hearing notices violates sec. 75(4): Allahabad High Court. *  TAX EVASION - Sec. 74 GST SCN quashed for not spelling out fraud, wilful misstatement or suppression: Allahabad High Court. *  STPI’s SOFTEX certification and NoC charges taxable as business support services: CESTAT. *  Suspicion can’t replace proof: CESTAT quashes penalty in alleged gold-smuggling operation. *   Limitation runs from communication of order: Madras High Court upholds rejection of delayed GST Appeals. *  Rajasthan High Court quashes GST demand over unsigned show cause notice. *  ITC recovery upheld where supplier failed to deposit GST: Rajasthan High Court. *  Customs commissioner’s empowered to make port trust liable for duty on pilfered goods: Supreme Court. *  Rectification proceedings can’t be used to challenge an uncontested GST assessment through a writ petition: Andhra Pradesh HC. *  GST proceedings against deceased proprietor unsustainable without notice to legal heir: GSTAT. *  Mere availment of ineligible self-assessed ITC doesn’t amount to suppression without evidence of fraud or wilful misstatement: GSTAT. *  Disposal of mining overburden by entity authorised by mining lease holder constitutes taxable service: CESTAT. *  Toll plaza data not mandatory for ITC refund: GSTAT. *  Disputed GST fraud allegations require investigation: Punjab and Haryana High Court makes interim bail absolute in alleged fraud and GST fraud case. *  Non-manufacturer contractor liable to deposit excess excise duty collected from buyer: CESTAT. *  GST order can’t reject taxpayer’s reply as “not satisfactory” without reasons: Madhya Pradesh High Court. *  Uncorroborated statements can’t establish alleged diversion of duty-free goods: CESTAT. *  Erection services were not liable to service tax prior to 10th september 2004: CESTAT. *  Sec. 74 GST notice must spell out statutory ingredients for invoking extended tax demand proceedings: Allahabad High Court. *  No jurisdictional bar under section 6(2)(b) in parallel CGST SGST proceedings: Delhi High Court refuses to bypass GST appeal remedy. *  Madras High Court remits GST demand for fresh adjudication after taxpayer claims it was unaware of SCN following business closure.  

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PJ/Case Laws/2012-13/1296

Whether simultaneous penalty under section 76 and 78 of the Finance Act can be imposed for period prior to amendment?

Case:- EXCISE, HALDIA Vs  MITTAL TECH NOPACK P LTD
 
Citation:-2012-TIOL-1507-CESTAT-KOL
 
Issue:-Whether simultaneous penalty under section 76 and 78 of the Finance Act can be imposed for period prior to amendment?
 
Brief Facts:-The Assessee had rendered services under the heading 'Business Auxiliary Service' but failed to discharge the Service Tax. Consequently a show cause notice was issued to them for recovery of Service Tax as well as penalty under Section 76 and 78 of the Finance Act, 1994. The entire amount of Service Tax has been paid by the applicant before issuance of show cause notice. The Adjudicating Authority confirmed the demand and imposed penalty equivalent to Service Tax under Section 78 of the Finance Act 1994 only. The Revenue filed the appeal before the Commissioner of Central Excise (Appeals) for non imposition of penalty under 76 of the Finance Act. The Ld. Commissioner (Appeal) dismissed the appeal filed by the Revenue and upheld the order in original of the Lower Authority. Hence the present appeal.
 
Appellant Contentions:- The Appellant submitted that both the Lower authorities has erred in not imposing the penalty under 76 of the Finance Act and he relied on judgment of the Honible Kerala High Court in the case of Assistant Commissioner of Central Excise Vs, Krishna Poduval.
 
Respondent Contentions:- The Respondent submitted that both the Lower Authorities has rightly not imposed penalty under Section 76  once penalty under 78 of Finance Act was imposed. They submitted that the said concept of imposition of penalty both under Section 76 and 78 has been done away with by amending the respective provisions w.e.f. 10th May, 2008. This conforms the view taken by the Tribunal in a number of cases that penalty cannot be imposed under both these sections. In this connection, they have also referred to the recent judgment of Hon'ble Punjab and Haryana High Court in the case of Commissioner of Central Excise Vs. First Flight Courier Ltd.
 
Reasoning of Judgment:- We have considered submissions on both sides and after that the moot issue to be decided in the instant appeal is as to whether imposition of penalty under Section 76 of the Act is mandatory when penalty under Section 78 of the Act is there in the Order in Original? Section 76 of the Act provides imposition of penalty for failure to make payment of service tax in respect of SCN issued within stipulated one year time and section 78 of the Act provides imposition of penalty for SCN invoking extended period alleging fraud, suppression on the part of the assessee. We have relied on tribunal's judgment in the case of The Financers Vs. CCE wherein Double penalty under section 76 not imposable in cases where penalty imposed under section 78 for suppression". Therefore, we find that simultaneous imposition of both penalties is double punishment to the appellant and thus not justified. In a recent judgment of High Court, the case of Commissioner of Central Excise Vs. First Flight Courier Ltd. (supra) taking into consideration the amending provision, has specifically answered this question. In such situation, even if reasoning given by the appellate authority that penalty under section 78 of the Act was imposed, penalty under section 76 of the Act could never be imposed may not be correct. This thinking was also in consonance with the amendment now incorporated though the said amendment may not have been applicable at the relevant time. In view of the above, we find there is no merit in the appeal filed by the Revenue and accordingly the same is dismissed. Appeal is dismissed.
 
Decision: - Appeal dismissed.
 
Comment:This case draws the analogy that simultaneous penalty under section 76 and 78 of the Finance Act, 1994 cannot be imposed even for the period prior to the amendment i.e. 10.05.2008 But the department does not agree the same. They have imposed penalty under both the sections prior to 10.5.08. The litigation is going on. But after 10.5.08 that the law has been amended and it is categorically mentioned that the penalty cannot be imposed under both the sections.
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