2019 (1) TMI 1501 - AT - Service Tax

Penalty u/s 76, 77 and 78 of FA - Simultaneous penalty u/s 76 and 78 of FA - Mis-declaration - service tax registration not obtained - Held that - It is settled law that penalty under Section 78 as well as 76 cannot be imposed simultaneously. In the present case the penalty under Section 78 has been imposed by the adjudicating authority. In the case of Bajaj Travels Ltd Vs. CST, Delhi 2016 (2) TMI 172 - GUJARAT HIGH COURT the Hon ble High Court of Delhi has held that the amendment in Section 78 whereby it is provided that when penalty under Section 78 is imposed, no penalty under Section 76 should be imposed. This amendment is of clarificatory nature hence, it is effective retrospectively. The penalty under section 76 is set aside by the adjudicating authority is legal and proper - As regard penalty under Section 77 since the adjudicating authority despite giving clear finding in para 35, has not passed any order, matter is remanded to adjudicating authority for passing an order - appeal allowed in part and part matter on remand.

Summary

Issues:
Imposition of penalty under Section 76 and 77 - Clarification on simultaneous imposition of penalties - Remand of penalty under Section 77 for adjudication.

Analysis:
The appellate tribunal addressed the issue of imposing penalties under Section 76 and 77 in the present appeal. The adjudicating authority had imposed a penalty under Section 78 but did not impose a penalty under Section 77, despite clear findings supporting it. The tribunal noted that penalties under Section 76 and 78 cannot be imposed simultaneously, citing legal precedents such as the case of Bajaj Travels Ltd Vs. CST, Delhi. This case law clarified that when a penalty under Section 78 is imposed, no penalty under Section 76 should be imposed, and this amendment is effective retrospectively. The tribunal upheld the adjudicating authority's decision to set aside the penalty under Section 76, as it was legal and proper based on the established legal principles. However, regarding the penalty under Section 77, the tribunal found that the adjudicating authority had not passed any order despite clear findings in para 35 of the impugned order. Therefore, the tribunal remanded the issue of penalty under Section 77 back to the adjudicating authority for a decision. The appeal was ultimately dismissed in terms of penalty under Section 76 and remanded for further adjudication on penalty under Section 77.