2011 (9) TMI 380 - AT - Service Tax

Penalty under section 76 & 77 - transport of goods by road service - Appelant contended that once the benefit of section 80 stands given to them for the purpose of imposition of penalty under section 78, the same benefit is required to be extended to penalties imposable under section 76 & 77 - the Tribunal in the case of Anil Kumar Yadav vs. CCE, Pondicherry 2011 -TMI - 202874 - CESTAT, CHENNAI has held that once the provisions of section 80 are invoked, the lower authorities have no jurisdiction to impose penalty under section 76 & 77 ibid and to waive penalty under section 78. The penalty under all the said sections are required to be waived once reasonable cause has been held to be existing - Appeal disposed off accordingly.

Summary

Issues: Imposition of penalty under sections 76 & 77 of the Finance Act, 1994 in relation to transportation of coal.

In this case, the Appellate Tribunal CESTAT, New Delhi dealt with appeals arising from orders passed by the Commissioner and the Commissioner (Appeals) regarding the imposition of penalties under sections 76 & 77 of the Finance Act, 1994. The issue revolved around the confirmation of service tax against the appellants for the transportation of coal, classified under 'transport of goods by road service'. The appellants did not contest the demand of duty but challenged the imposition of penalties. The learned Advocate for the appellant argued that since penalty under section 78 was not imposed due to bonafide reasons, the same leniency should extend to penalties under sections 76 & 77. Reference was made to a previous order by the Commissioner (Appeals) in a similar case where penalties were set aside due to the absence of malafide intent. The Tribunal noted that once section 80 is invoked to waive penalties under section 78, there is no justification to impose penalties under sections 76 & 77. The Tribunal cited a precedent to support the view that all penalties should be waived if a reasonable cause exists. Since section 80 was already invoked in the present case without any penalty under section 78, the Tribunal upheld the order but set aside the penalties under sections 76 & 77. The decision was made based on the principle that once section 80 is applied, it extends to penalties under sections 76, 77, & 78. Therefore, the penalties under sections 76 & 77 were revoked, while the rest of the impugned orders were upheld, and both appeals were disposed of accordingly.