2013 (6) TMI 415 - AT - Service Tax

Power of revisionary authority to levy penalty - revision u/s 84 - Held that - question arising for consideration in this appeal is squarely covered against the appellant by a judgement of the Hon ble High Court of Karnataka viz. Commissioner of Service Tax vs. Motor World 2012 (6) TMI 69 - KARNATAKA HIGH COURT wherein one of the questions of law considered by the Hon ble High Court was Whether the revisionary authority has jurisdiction to impose penalty for the first time when it has not been imposed by the adjudicating or assessing authority by invoking Section 80 - When the assessing authority, in its discretion has held that no penalty is leviable, by virtue of Section 80 of the Act, the revisionary authority cannot invoke its jurisdiction and impose penalty for the first time. - the same effect was given in the case of Sneha Minerals vs. Commissioner of Central Excise, Belgaum 2010 (7) TMI 387 - CESTAT, BANGALORE .

Summary

Issues:
Department seeking to penalize respondent under Sections 76 to 78 of the Finance Act, 1994.

Analysis:
The appeal filed by the department aimed to penalize the respondent under Sections 76 to 78 of the Finance Act, 1994. The original authority did not impose any penalty under these provisions, invoking Section 80 of the Act. The order-in-original was proposed for review under Section 84, but the Commissioner dropped the proposal. The department's appeal was directed against the Commissioner's order as the revisionary authority.

The key question in this appeal was whether the revisionary authority had the jurisdiction to impose a penalty for the first time when it was not imposed by the assessing authority. The Tribunal found that the issue was settled by a judgment of the Hon'ble High Court of Karnataka in the case of Commissioner of Service Tax vs. Motor World. The High Court held that if the assessing authority, at its discretion, decided that no penalty was leviable under Section 80 of the Act, the revisionary authority could not impose a penalty for the first time. The Tribunal also cited its own previous decision in the case of Sneha Minerals vs. Commissioner of Central Excise, Belgaum, which supported the same principle.

Based on the established case law, the Tribunal upheld the impugned order and dismissed the department's appeal. The judgment was pronounced and dictated in the open court by the presiding judges, Shri P. G. Chacko and Shri M. Veeraiyan, JJ. The legal representatives for the appellant and respondent were Mr. N. Jagdish, Superintendent (AR), and Mr. S. Ananthan, Consultant, respectively.