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2009 (5) TMI 811 - AT - Central Excise
Issues: Appeal against setting aside penalty under Section 78 of the Finance Act, 1994
Analysis: The appeal was filed by the Revenue against the Order-in-Appeal passed by the Commissioner (Appeals) where the penalty under Section 78 of the Finance Act, 1994 was set aside. The case involved the provision of service of Commercial or Industrial Construction, with tax demanded for the period from 2005 to 2007 through a Show Cause Notice dated 6-9-2007. The original authority confirmed the tax demand and imposed penalties under Sections 76, 77, and 78 of the Act. However, the Commissioner (Appeals) dropped the demand specifically under Section 78. Upon reviewing the impugned order, it was noted that the demand of tax was for an extended period of limitation. The Commissioner (Appeals) observed that penalties under Sections 76 and 77 were applicable, leading to the setting aside of the penalty under Section 78. The learned Advocate argued that there was no suppression of facts with intent to evade payment of duty, which led the Commissioner (Appeals) to rightly drop the demand under Section 78. However, the presiding judge found that the demand of tax for the extended period was confirmed due to the suppression of facts with intent to evade payment of duty, making the penalty under Section 78 applicable. This discrepancy led to the conclusion that the matter required further examination based on the facts presented. It was highlighted that the respondents did not respond to the Show Cause Notice nor attend the personal hearing before the original authority. Consequently, the impugned order was set aside, and the case was remanded back to the original authority for a fresh decision, taking into account the submissions of the respondents. It was emphasized that the original authority must provide a proper opportunity for the appellants to be heard before passing any new order. Ultimately, the appeal was allowed by way of remand, ensuring a fair and thorough reconsideration of the case.
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