2016 (12) TMI 1870 - AT - Central Excise

Levy of penalty u/s. 76 of FA - entire amount of Service Tax paid along with interest, for the delayed period before issuance of the show cause notice - HELD THAT - It is observed that the Order-in-Revision was issued on 26-4-2010. The revision powers of the jurisdictional Commissioner were done away with as per the substituted Section 84 of the Finance Act, 2009 w.e.f. 19-8-2009. Order-in-Revision passed by the Commissioner after 19-8-2009 is thus without jurisdiction and is set aside. Appeal allowed.

Summary

Issues: Jurisdiction of Commissioner to impose penalty under Section 76 of the Finance Act, 1994 after the revision powers were abolished.

Analysis:
1. The Assistant Commissioner initially imposed penalties under Sections 77 and 78 of the Finance Act, 1994, refraining from imposing any penalty under Section 76. The Commissioner, through a review, modified the order and imposed a penalty under Section 76 on the appellant, a Clearing and Forwarding Agent, for delayed payment of Service Tax. The appellant contended that they had paid the entire tax amount along with interest before the show cause notice, thus challenging the imposition of penalty.

2. During the hearing, the Superintendent representing the Revenue supported the Commissioner's order. The Commissioner's decision was to impose a penalty under Section 76 at a daily rate calculated from the due date of payment till the actual payment date, not exceeding the Service Tax amount due. The appellant's consultant reiterated the grounds of appeal against this penalty.

3. Upon review, the Tribunal noted that the Order-in-Revision was issued after the revision powers of the Commissioner were abolished under the substituted Section 84 of the Finance Act, 2009. As the revision powers were eliminated effective from 19-8-2009, any order passed by the Commissioner after this date lacked jurisdiction. Consequently, the Tribunal set aside the Commissioner's decision to impose a penalty under Section 76. The appellant's appeal was allowed based on the lack of jurisdiction of the Commissioner to impose the penalty post the abolition of revision powers.