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TMI Blog2015 (11) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 25% of Rs. 25,20,402/- which comes to Rs. 6,30,100/- if the same was paid within 30 days from the date of communication of the Order-in-Original alongwith service tax and interest amount confirmed. However, since the Respondent has paid penalty of only Rs. 3,15,050/- out of the said reduced penalty of Rs. 6,30,000/- payable by him at that time, and the period of 30 days prescribed under the third proviso to Section 78(1) of the Act is already over, the Respondent is held liable to pay the entire penalty amount of Rs. 12,60,201/- as imposed by the Ld. Adjudicating Authority. 2. The fact of the case is that the assessee M/s. R.K Enterprises engaged in proceeding taxable service under the manpower recruitment service and holding service tax registration w.e.f. 4/7/2005. It was noticed by the department that assessee was evading payment of service tax on the services provided during the period from July, 2005 onwards; therefore investigation was carried out which revealed that appellant is charging and recovering service tax from their client. It was noticed that they had not deposited service tax collected from their client to the government account. Therefore, a show cause notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x amount and 25% of Rs. 25,20,402/- which comes to Rs. 6,30,100/- within 30 days from the date of communication of the order-in-original, then the assessee is eligible for paying penalty of equal amount to 25% of service tax amount confirmed. In the order it was also held that since the assessee has paid penalty only Rs. 3,15,050/- out of the said reduced penalty of Rs. 6,30,100/- payable by him at the time and period of 30 days prescribed under the third proviso to Section 78(1) of the Act is already over, the assessee is liable to pay the entire penalty amount of Rs. 12,60,201/- as imposed by the Ld. Adjudicating authority. Aggrieved by the aforesaid impugned order the Revenue as well as assessee filed the present appeal. The ground taken by the Revenue is that since the assessee has not paid the penalty of 25% of the service tax amount within the 30 days of adjudication order they are liable to pay 100% penalty i.e. Rs. 25,20,402/- and provision of 50% penalty as per the amended Section 78 is not available to the assessee on the ground that period of non payment is prior to amendment in Section 78 and as per Section 38A of Central Excise Act there is no saving clause and accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0)ELT 186(Guj)]. With reference to that he argued that since there is no clause to save the provisions of unamended Section 78, therefore unamended Section 78 shall not apply, therefore amendment which provides for 50% penalty shall be applicable. He therefore submits that in view of this judgment, Revenues contention is not sustainable that any application or liability etc. accrued or incurred can be save by Section that is of General Clauses Act. He further submits that in the case of M/s. Vinyl Chemicals India Ltd. & Anr Vs. The State of Maharashtra & Ors. in Writ Petition No. 2772 of 2014 the Hon'ble High Court of Bombay vide order dated 28/4/2015 placing reliance on Apex court judgment in the case of Gursharan Singh and Others Vs. New Delhi Municipal Committee & Ors. (1996) 2 SSC 459, he submits that whether rightly or wrongly, original authority in the adjudication order held that assesse is required to pay 25% of the penalty (i.e. 50% of Service tax amount) the assesse acted on the bonafide belief following order of the adjudication authority. The revenue has not put any effort to get the order modified on this aspect by filing appeal, challenging this particular portion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod of the offence involved is prior to the amendment of Section 78 and therefore even after substitution of Section 78, the action can be taken under the unamended Section 78 for the reason that Section 38 of Central Excise Act provide saving and provision of unamended section 78 should have been invoked by the lower authority and accordingly instead of 50%, 100% penalty should have been imposed for the reason that assessee did not deposit 25% of the service tax amount confirmed. 5. I have carefully considered the submissions made by both sides and perused the record. 6. The issue to be decided by me is three folds; (1) Whether the adjudicating authority holding imposition of penalty of 25% of the penalty (50% of service tax amount) is correct and legal. (2) Whether adjudicating authority as well as the Commissioner (Appeals) are correct in invoking the amended provision of Section 78 where under the provision 50% penalty is provided. (3) Whether the assesee's alternative submission that they have paid excess amount of service tax and if the same is considered as payment against short fall of interest and even penalty at 25% of Service tax is held to be correct, whether, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25% is not of penalty but of service tax. Therefore it is apparent error and the assesee could not be allowed to take benefit of any such mistake, therefore I am of the view that the term used by the adjudicating authority i.e. 25% of the penalty should be read as 25% of the Service tax, if that is so, on going through alternative submission of the Ld. Counsel that the assessee has paid total amount as under: Service tax 32,09,680/- Interest 3,82,687/- Penalty 3,20,050/- Total 39,12,417/- If the Revenue's contention is accepted regarding the payment of service tax dues, interest and 25% of service tax as penalty then the total amount as under: Service tax 25,20,402/- Interest 3,82,687/- Penalty 25% of Service Tax amount of Rs, 25,20,402/- 6,30,100/- Total 35,33,189/- From the above it is seen that against Revenue's claim of Rs. 32,63,189/- the assessee has paid total amount of Rs. 35,33,189/- which is much higher than amount required to be paid. Only point is that assessee has paid excess amount of Service tax which in my considered view should be considered and adjusted against the short payment of penalty. However, Ld. Counsel has fairly agreed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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