2016 (1) TMI 298 - AT - Service Tax

Levy of penalty u/s 76 in a review passed by the Commissioner of Central Excise, Customs and Service Tax u/s 84 - Held that - Since the issue involved in this appeal is before the adjudicating authority on remand from the Tribunal 2010 (12) TMI 89 - CESTAT, MUMBAI , we find that the impugned order in review which imposes penalty under Section 76, also needs to be set aside, as it does not survive when the order in original dated 31/10/2010 is already set aside by doctrine of merger.

Summary

Issues:
Appeal against Order-in-Original No. 23/ST/COMMR/2010 dated 28/07/2010 - Imposition of penalty under Section 76 of the Finance Act 1994 - Review of order passed by the Commissioner of Central Excise, Customs, and Service Tax - Doctrine of merger.

Analysis:
The appeal was filed against Order-in-Original No. 23/ST/COMMR/2010 dated 28/07/2010. The appellant challenged the order in review passed by the Commissioner of Central Excise, Customs, and Service Tax, Aurangabad. The issue revolved around the imposition of a penalty under Section 76 of the Finance Act 1994. The adjudicating authority, through Order-in-Original No.121/ST/Additional Commissioner/2008 dated 31.10.2008, found the appellant liable to pay service tax, interest, and imposed a penalty under Section 78 of the Finance Act 1994. Notably, no penalty was imposed under Section 76 of the Finance Act 1994. Subsequently, the appellant filed an appeal before the first appellate authority, which upheld the decision. The matter was then taken to the tribunal, which set aside the order in appeal dated 25/06/2009 and remanded it to the adjudicating authority.

In light of the tribunal's decision, the impugned order in review imposing a penalty under Section 76 was deemed unnecessary as the original order dated 31/10/2010 had been set aside by the doctrine of merger. The tribunal found that since the issue was already before the adjudicating authority on remand, the penalty imposed under Section 76 in the review order needed to be set aside. Consequently, the impugned order in review was set aside, and the appeal was disposed of accordingly.

This judgment highlights the application of the doctrine of merger in setting aside a penalty imposed under Section 76 of the Finance Act 1994 in a review order when the original order has been remanded by the tribunal. The decision emphasizes the legal principles governing the review of orders and the implications of appellate proceedings on subsequent actions by the adjudicating authority.