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TMI Blog2015 (7) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... llected but not paid to the Govt. account under Section 11 D of Central Excise Act 1944. The Addl Commissioner ordered appropriation and adjustment of Rs. 1,00,000/- paid by the assessee before the issue of show-cause notice. Addl. Commissioner imposed a penalty of Rs. 16,51,993/- under Section 78 of Finance Act 1994. This was done in view of the fact that appellant had deposited an amount of Rs. 1,00,000/- prior to the issue of show cause notice and this was deducted by the Addl. Commissioner for arriving at the quantum of penalty payable by the assessee. 2. Commissioner took the view that according to the provisions of Section 73, when a person pays a part amount along with interest and 25% of the part amount towards penalty, then, only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r better appreciation): "SECTION 78. Penalty for suppressing value of taxable service - Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, by reason of - (a) fraud; or (b) collusion; or (c) wilful mis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax, the person, liable to pay such service tax or erroneous refund, as determined under sub-section (2) of section 73, shall also be liable to pay a penalty, in addition to such service tax and interest thereon, if any, payable by him, which shall not be less than, but which shall not exceed twice, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y which such increase in service tax takes effect." 6. He relies on 3rd and 4th proviso and submits that only by appellate authorities, that too when there is an increase or decrease in the amount demanded, option to pay 25% of the increased amount can be extended. According to the provisions, even when the penalty is enhanced by Commissioner (Appeals) or by Tribunal, the option to pay 25% would be limited to enhanced duty, interest and penalty and not to the amount which was confirmed by the original authority. That being the position, Commissioner could not have extended the option. 7. I have considered the submissions. The provisions relating to extension of option and availability of option in respect of Commissioner (Appeals) and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner (Appeals) or the Tribunal pass orders enhancing the duty or enhancing the penalty. Order of the original authority gets merged with order passed by the Tribunal or the Commissioner (Appeals). Therefore, one way of looking at it is that the orders passed by Commissioner (Appeals) or the Tribunal and the order-in-revision passed by the Commissioner have the similar consequences and therefore, the option given by the Commissioner is not in accordance with law. In the second scenario, the order is only a modification or a revision. In such a case it is possible to take a view that while modifying the order passed by the original authority, Commissioner has the liberty to modify the portion relating to the option also. Since the Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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