2013 (11) TMI 1501 - AT - Service Tax

Penalty u/s 76 and 78 - Simultaneous penalty - Held that - show cause notice was issued in this case after 10.05.2008 when proviso to Section 78 of the Finance Act, 1994 was already existing after its amendment - Recourse can be had to the provisions as prevailing at the time of initiation of proceedings, and the period available would be the one as permissible under the provisions existing at the time of issuance of show cause notice, in spite of the fact that the short-levy or non-levy refers, to the period when different period of limitation was available - provisions existing on the date of show cause notice will be applicable. In the present appeal, the period involved is 01.04.2006 to 31.03.2011 and show cause notice was issued on 05.07.2011. Proviso to Section 78 of Finance Act, 1994 was introduced with effect from 10.05.2008 and was thus existing on the date of issue of show cause notice - show cause notice was issued when proviso to Section 78 of Finance Act, 1994 was existing, therefore no penalty under Section 76 is imposable when Section 78 of Finance Act, 1994 penalty is imposed - Following decision of ATMA Steels Pvt. Ltd. & Ors Vs. CCE Chandigarh & Ors 1984 (6) TMI 60 - CEGAT, NEW DELHI - Decided in favour of assessee.

Summary

Issues:
1. Whether penalties under Section 76 and 78 can be simultaneously imposed before 10.05.2008.
2. Whether the proviso added to Section 78 can be given retrospective effect.
3. Whether penalties can be simultaneously imposed under Section 76 and 78 for the period prior to 16.05.2008.
4. Whether the show cause notice issued after 10.05.2008 affects the imposition of penalties.

Analysis:

Issue 1:
The appellant argued that the amended proviso added to Section 78 of the Finance Act, 1994 should be applicable to the period before 10.05.2008. They cited various judgments to support their argument. However, the Revenue contended that the proviso added to Section 78 from 10.05.2008 cannot have retrospective effect. The Tribunal examined the case records and referred to the Delhi High Court judgment in Bajaj Travels Ltd. Vs. CST, which clarified that penalties under Sections 76 and 78 can be simultaneously imposed before 10.05.2008.

Issue 2:
The appellant relied on the show cause notice being issued after 10.05.2008, when the proviso to Section 78 was already in effect. They cited legal precedents to argue that the provisions existing at the time of the show cause notice should apply. The Tribunal considered the judgments in Aneja Property Dealer Vs. CCE Ludhiana, Viking Tours & Travels Vs. CST Chennai, and Jivant Enterprise Vs. CST Ahmedabad, concluding that as the show cause notice was issued when the proviso to Section 78 was in effect, no penalty under Section 76 is imposable when Section 78 penalty is imposed.

Final Decision:
The Tribunal allowed the appeal filed by the appellant, emphasizing that penalties can be simultaneously imposed under Section 76 and 78 for the period before 16.05.2008. The judgment clarified that the proviso added to Section 78 by the Finance Act, 2008 operates prospectively and does not have retrospective effect. Additionally, the Tribunal upheld that the provisions existing at the time of the show cause notice should determine the imposition of penalties.