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TMI Blog2015 (1) TMI 812X X X X Extracts X X X X X X X X Extracts X X X X ..... And R. Karuppiah,JJ. For the Appellant : Mr. K. Magesh For the Respondents : Mr. M. Santhanaraman for RR-2 3 JUDGMENT (Delivered By R. Sudhakar, J.) Aggrieved by the order of the Appellate Tribunal in dismissing the appeal filed by it, the assessee is before this Court challenging the said order by filing the present appeal. This Court, vide order dated 05.02.09, framed the following substantial questions of law for consideration:- 1) Whether the penalty is imposable where the tax is paid before issuance of show cause notice? 2) Whether lower authorities were right in not exercising their power under Section 80 of the Finance Act? 2. The appellant is a service provider, more particularly outdoor catering service. A show cause notice was issued, which was agitated and a demand for service tax of ₹ 2,60,225/- was passed together with education cess of ₹ 5,204/- totaling to ₹ 2,65,429/- for the period 10.9.04 to 30.6.06 under proviso to Section 73 (1) of the Finance Act, 1994. In addition to the above, penalty of ₹ 10,000/- under Section 76, ₹ 1,000/- under Section 77 and ₹ 10,000/- under Section 78 of the Act wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equal to tax (including cess) has to be imposed on the party, which was not done by the original authority, but rightly done by the revisional authority. 5. On the penalty of ₹ 1000/- imposed under Section 77 of the Act, the Tribunal confirmed the same. However, insofar as the penalty of ₹ 10,000/- imposed under Section 76 of the Act is concerned, the Tribunal remanded the matter back to the Commissioner for redetermination of the penalty. The relevant portion of the order is as under :- 7. In the result, the appeal is dismissed in relation to the penalty imposed on the appellant by the revisional authority under Section 78 of the Finance Act, 1994 and is allowed by way of remand as regards the penalty under Section 76 of the Act. The learned Commissioner shall pass fresh order on the question as to what amount of penalty is liable to be imposed on the assessee under Section 76 of the Finance Act, 1994. It goes without saying that before doing so, the Commissioner shall give the assessee a reasonable opportunity of being heard. Aggrieved against the said order of the Tribunal, the present appeal has been filed by the assessee. 6. Heard the learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a matter of fact there is no occasion for it!) with regard to the several other statutory provisions that came up for consideration in that decision. 25. In the light of the discussion made above it is evident that in both the appeals, orders were passed by the Tribunal on a wrong premise. In both the appeals, therefore, the impugned orders passed by the Tribunal are set aside and the matters are remitted to the respective Tribunals for fresh consideration, in accordance with law, and in the light of this judgment.... 10. This issue was also considered by this Court in Commissioner of Central Excise v. Eurotherm Del India Ltd., 2014 (307) ELT 490 (Mad.), wherein it was held as under: 4. The Department's contention before the Tribunal was that whether the lower appellate authority was right in setting aside the mandatory penalty under Rule 57-1(4) of the Central Excise Rules, 1944 and Section 11AC of the Central Excise Act, 1944 for the entire period subsequent to 28-9-1996. The Tribunal did not venture to examine this question but merely stated that it need not interfere with the decision of the lower appellate authority. 5. We have perused the grounds of appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the demand of ₹ 1,64,687/- under Rule 57-I of Central Excise Rules, 1944, the demand of ₹ 1,91,681/- against the clearances Modvat credit availed capital goods i.e. Mobile crane, to their de-coiling plant situated outside their manufacturing premises under Rule 57U of Central Excise Rules, 1944; (iii) impose a total penalty of ₹ 2,86,368/- as equal to the sum total of the above confirmed demands under Rule 57-I 57U of Central Excise Rules, 1944; (iv) impose a penalty of ₹ 25,000/- under Rule 173Q of the Central Excise Rules, 1994 on M/s.Drums and Barrels (Madras) Pvt. Limited and (v) direct the assessees to pay interest at appropriate rates as provided in the Modvat Rules. 5. While 173Q providers for discretion with the authority with regard to the quantum of penalty. In the same case, the Supreme Court observed in Paragraph 7 that, where the outer limit of penalty is fixed, which indicates the scope of discretion, Rules 57-I provides for imposition of a penalty equal to the credit so dissolved and therefore, as regards the imposition of penalty under Rule 57-I in a sum of ₹ 1,64,687/- could not have been reduced. Whereas, since the disc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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