2013 (11) TMI 766 - 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 - 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:
Whether penalty u/s. 76 of the Finance Act, 1994 is imposable when penalty u/s. 78 of the said Act is already imposed upon the respondents.

Analysis:
The appeals were filed by the Commissioner of Central Excise against the Order-in-Appeal passed by the Commissioner (Appeals) Surat. The main issue revolved around the imposition of penalties under sections 76 and 78 of the Finance Act, 1994. The Original Adjudicating Authority did not impose any penalty under section 76, which was challenged. The Commissioner (Appeals) held that due to an amendment in section 78 of the Finance Act, 1994, no penalty under section 76 is imposable once penalty under section 78 has been imposed. The Commissioner relied on the judgment of CCE Vs. First Flight Courier Ltd. [2011 (22) S.T.R. 622 (P&H)] to support this decision.

The appellant's advocate requested an adjournment due to illness, but as per the case records, adjournment requests were previously made for other reasons, leading to the rejection of the adjournment request. The case proceeded for final disposal without further delay.

During the hearing, the revenue's representative relied on various case laws, 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 case law British Airways PLC Vs. Commissioner ST, New Delhi, highlighted that penalties under sections 76 and 78 of the Finance Act, 1994 could be imposed simultaneously, as they operate in different fields even if the offense occurred in the same transaction.

Moreover, the judgment of Anand Decoreters & Hirers Vs. Commissioner ST, Ahmedabad emphasized the misdeclaration of value and suppression of facts by the appellant, leading to the imposition of penalties under sections 76 and 78. The judgment acknowledged conflicting decisions from different High Courts but ultimately followed the decision of the High Court of Delhi regarding the penalties under the Finance Act, 1994.

Based on the precedents and case laws, it was concluded that prior to 10.05.2008, simultaneous penalties under sections 76 and 78 were imposable on the respondents. Consequently, the appeals filed by the revenue were allowed, and the judgment was pronounced on 03.09.13.