2013 (12) TMI 964 - AT - Service Tax

Waiver of pre deposit - Penalty u/s 84 - Revisionary power of Commissioner - Held that - Commissioner as a revisionary authority has given the reasoning that the service tax liability evaded was for the period 2005-06 and hence, penalty is imposable under Section 76 of Finance Act, 1994. In my considered view, prima facie, the appellant has made out a case for waiver of pre-deposit as, if the provisions of Section 78 and sub section 5 Section 78(5) clearly hold, that penalty imposed is equal to the amount of service tax liability escaped, penalty under Section 76 cannot be imposed during the relevant period - Stay granted.

Summary

Issues:
Waiver of pre-deposit of penalty under Section 84 of Finance Act, 1994 imposed by Commissioner as a revisionary authority.

Analysis:
The appellant filed a stay petition seeking waiver of pre-deposit of penalty amounting to Rs. 2,41,861 imposed by the Commissioner of Central Excise & Customs under Section 84 of the Finance Act, 1994. Despite the absence of representation from the appellant, the Tribunal proceeded with the case due to the narrow compass of the issue. The learned SDR was heard in the absence of the appellant.

Upon reviewing the records, it was observed that the main issue revolved around the Commissioner's exercise of powers as a revisionary authority to impose penalties under Section 76 of the Finance Act, 1994. The penalty was initially proposed in a show cause notice but dropped by the adjudicating authority on the basis that penalties under Sections 76 and 78 were mutually exclusive before a specific date. However, the Commissioner, as a revisionary authority, reasoned that the service tax liability evaded pertained to the period 2005-06, justifying the imposition of penalty under Section 76. The Tribunal, after careful consideration, found that the appellant had established a prima facie case for the waiver of pre-deposit. This decision was supported by the provisions of Section 78 and sub-section 5, which indicated that penalties under Section 76 could not be imposed when the penalty was equal to the amount of service tax liability evaded during the relevant period.

Consequently, the Tribunal granted the appellant's application for the waiver of pre-deposit of the penalty amounts involved. The recovery of the penalty was stayed pending the final disposal of the appeal. The judgment was dictated and pronounced in court by the presiding judge.