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TMI Blog2014 (6) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... 438/ 2012 Municipal Corporation, Porbandar 75/ 2012/ (BVR)/ COMMR (A)/ RBT/RAJ 2. Briefly stated the facts relevant for disposal of the appeals are that the respondents were liable to pay service tax during the financial year 2005-06 to 2009-10 but they failed to pay service tax for these periods. Show cause notices were issued to them in the year 2010/ 2011 by invoking extended period of time limitation. In the case at S. No. 1, 2, 3, and 5 of the above Table, the original adjudicating authority imposed penalties under Section 78 of the Finance Act, 1994 (hereinafter referred to as 'the Act') on the respondents for evasion of service tax during the said periods, but did not impose penalty on them under Section 76 of the Act relying upon the following decisions: (i) CCE Vs. First Flight Couriers Ltd. - [2011 (22) STR 622 (P&H)]; (ii) CCE, Chandigarh Vs. City Motors - [2010 (19) STR 486 (P&H)]; (iii) Chanasma Taluka Sarvoday Mazdoor Kamdar Sahakari Mandli Limited Vs. CCE, Ahmedabad - [2012 (25) STR 444 (Tri. Ahmd.)]; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rior to 10.05.2008, and that penalties could be imposed on the respondents simultaneously under Section 76 and as well as under Section 78 for the period prior to 10.05.2008, as ingredients of both the sections were present in the cases under consideration. He cited the following case laws in support his contention: (a) Assistant Commissioner of Central Excise Vs. Krishna Poduval - [2006 (1) STR 185 (Ker.)]; (b) Cadbury India Limited Vs. Commissioner of Customs & Central Excise, Pune-I - [2008 (232) ELT 224 (Tri. L.B.)]; and (c) Bajaj Travels Ltd. Vs. Commissioner of Service Tax - [2012 (25) STR (Del.)]. 4. None was present for the respondents other than Shri Naitik Mehta (CA). However, the respondent - M/s Om Sai Engineering Works had filed Memorandum of Cross Objection dated 10.12.2012 in Revenue's appeal No. ST/ 441/ 2012-SM. The respondent submitted in its cross objection as under: (i) The Central Board of Excise & Customs has issued Circular F. No. 390/ Misc./ 163/ 2010-JC dated 17.08.2011 directing the field formations not to file appeals before the CESTAT/ High Courts/ Supreme Court, where the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iv) The respondent also submitted that simultaneous penalties under Sections 77 and 78 were not imposable on them as held in the case laws cited in Para 2 above. 5. Heard both sides and perused the case records. The issues to be decided in these appeals are: (I) Whether the following proviso inserted in Section 78 of the Finance Act, 1994 on 10.05.2008 had retrospective operation? Provided also that if the penalty is payable under this section, the provisions of section 76 shall not apply. (II) Whether penalties under Sections 76 and 78 were imposable simultaneously on the respondents for failure to pay service tax for the period prior to 10.05.2008 where show cause notices were issued to them in the year 2010/2011? (III) Whether the Revenues appeals, where service tax evasion involved in litigation is up to five lac rupees, are maintainable in view of Central Board of Excise & Customs Circular F. No. 390/ Misc./ 163/ 2010-JC dated 17.08.2011 directing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 78 is imposed, the penalty for failure to pay service tax under Section 76 shall not apply. With this amendment the legal position now is that simultaneous penalties under both Section 76 and 78 of the Act would not be levied. However, since this amendment has come into force w.e.f. 16th May, 2008, it cannot have retrospective operation in the absence of any specific stipulation to this effect. Going by the nature of the amendment, it also cannot be said that this amendment is only clarificatory in nature. I find that the ratio of the above case laws is squarely applicable to the issue in hand, and I accordingly hold that the proviso inserted in Section 78 with effect from 10.05.2008 has prospective operation. 7. As regards the second issue, I find that in the case of Assistant Commissioner Vs. Krishna Poduval - [2006 (1) STR 184 (Ker.)], the Hon'ble Kerala High Court has held as follows: 11. The penalty imposable under S. 76 is for failure to pay service tax by the person liable to pay the same in accordance with the provisions of S. 68 and the Rules made thereunder, whereas S. 78 rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the five appeals under consideration, only one appeal filed by the Revenue against respondent at S. No. 4 of the Table in Para 1 above, involves evasion of service tax of more than five lac rupees (actual tax evasion Rs. 5,64,345/-). In the remaining cases, the amount of service tax evasion in each case is less than the monetary limit of five lac rupees. Appeals in these four cases were filed by the Revenue on 05.12.2012 when the CBEC Circular F. No. 390/ Misc./ 163/ 2010-JC dated 17.08.2011 was in force, which directed the field formations not to file appeals before the CESTAT where the amount involved is up to five lac rupees. Obviously, the Revenue should not have filed any appeal against these four persons, as the directions contained in CBEC circulars are binding on Departmental Officers. The same issue has been decided in favour of the assessee as per the Order No. A/10016/WZB/AHD/12 dtd 21/12/2012 passed by this Bench in the case of CST Ahmedabad vs. Gala Gymkhana Pvt Ltd (Appeal No. ST/34/2011). In view of the above, I hold that the Revenues Appeal Nos. ST/ 441/ 2012, ST/ 440/ 2012, ST/ 439/ 2012 and ST/ 438/ 2012 are not maintainable. 9. Based on the above observations, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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