2013 (11) TMI 765 - AT - Service Tax

Penalty u/s 78 - Simultaneous penalty u/s 76 and 78 - Period of applicability - Held that - penalties u/s. 76 & 78 of the Finance Act, 1994 can be simultaneously imposed prior to the amendment of section 78 w.e.f. 10.05.2008 - The decision delivered by a two Member bench will prevail upon the judgment delivered by a Single member bench - Following decision of Bajaj Travels Ltd. Vs. Commissioner of Service Tax 2011 (8) TMI 423 - DELHI HIGH COURT and Anand Decoreters & Hirers Vs. Commissioner ST, Ahmedabad 2013 (8) TMI 374 - CESTAT AHMEDABAD - penalties u/s. 76 and 78 of the Finance Act are simultaneously imposable upon a assessee for the period prior to 10.05.2008 - Decided in favour of Revenue.

Summary

Issues:
Simultaneous imposition of penalties under sections 76 & 78 of the Finance Act, 1994 for the period prior to 10.05.2008.

Analysis:
The appeal was filed by the revenue against the OIA rejecting their appeal on the grounds that once penalty under section 78 has been imposed, no penalty under section 76 is attracted due to the 5th proviso added to section 78 of the Finance Act, 1995. The respondent argued that no penalty under section 76 is attracted, citing judgments of previous cases. The revenue, represented by Sh. P.N. Sarvaiya, contended that penalties under both sections 76 & 78 are imposable for the period before 10.05.2008, referencing various judgments including British Airways PLC Vs. Commissioner ST, New Delhi [2013 (29) STR 177 (Tri. Del.)], Bajaj Travels Ltd. Vs. Commissioner [2012 (15) STR 417 (Del.)], and Anand Decoreters & Hirers Vs. Commissioner ST, Ahmedabad [2013 (30) STR 86 (Tri. Ahmd.)].

The main issue in this appeal was the simultaneous imposition of penalties under sections 76 & 78 of the Finance Act, 1994 for the period prior to 10.05.2008. The respondent argued that the amendment made on 10.05.2008 was only a clarification and applicable even for the period before that date, relying on previous judgments. The revenue cited judgments where penalties under both sections were upheld separately, even if offenses were committed in the same transaction. The decision in British Airways PLC case established that penalties under sections 76 & 78 could be imposed simultaneously before the 2008 amendment, and a decision by a two-member bench prevails over a single-member bench's judgment.

The judgment concluded that penalties under sections 76 & 78 of the Finance Act can be simultaneously imposed on an assessee for the period before 10.05.2008. The appeal filed by the Revenue was allowed, emphasizing the simultaneous imposition of penalties under both sections. The decision was pronounced in court on 03.09.13 by Mr. H.K. Thakur.