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TMI Blog2016 (3) TMI 575X X X X Extracts X X X X X X X X Extracts X X X X ..... Member (J) For the Appellant : Shri A B Kulgod, Asstt. Commissioner (AR) For the Respondent : None ORDER Per Ramesh Nair This Revenue's appeal is directed against PUN-EXCUS-003-APP-265-13-14 dated 16/9/2013 passed by the Commissioner of Central Excise (Appeals) Pune, wherein Ld. Commissioner (Appeals) rejected the appeal of the Revenue upholding Order-in-Original No. P-I/ADC/ST/60/2011 dated 28/12/2011. 2. The short issue involved in the present case is whether penalty equivalent to the service tax or 50% is imposable in terms of Section 78 keeping in view the amendment of Finance Act, 1994 effected on 8/4/2011. 3. Shri. A.B. Kulgod, Ld. Asstt. Commissioner (A.R.) appearing on behalf of the Revenue appellant submits that penal provisions by which penalty under Section 78 is 50% of the Service tax amount if the transaction of services are recorded in the records of the assessee has come into force w.e.f. 8/4/2011. Though the adjudication was done after this date but offence of evasion of service tax has taken place prior to 8/4/2011 and accordingly unamended provisions of Section 78 according to which penalty equivalent to the service tax is imposabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riginal would be applicable or the provisions of erstwhile Section 78 of the Act would be applicable in the present case as they existed during the period 2005-06 to 2009-10 (upto December, 2009) when the said services were received. Section 78 of the Act was substituted w.e.f. 8/4/2011. The appellant has relied upon Section 38A of the Central Excise Act, 1944, read with Section 83 of the Act, in their Grounds of Appeals. 8. Section 38A of the CEA saves a legal provision contained in a rule, notification or order made or issued under such rule, unless a different intention appears. Thus, for the purposes of Section 38A, the intention behind the change in the legal provision has to be examined first. Whenever any legislation is introduced in the Parliament, the intention behind introducing the said legislation is given in the Statement of Objects' which is also placed before the Parliament. In the case of changes in Central Excise Act, 1944 and Finance Act, 1994 dealing with Central Excise Service Tax matter, the legislative changes are contained in the Finance Act which is introduced every year. When, the Finance Act is introduced every year. When the Finance Act is intro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by carrying on surreptious activities at the cost of law-abiding business is sought to be neutralized. The revised system also encourages informed decision-making by the taxpayers at the early stages of investigation orverification by the Department. Changes proposed in the compliance mechanism are given in the following paragraphs. 4.4 The maximum penalty for delay in filing of return under section 70 is proposed to be increased from ₹ 2,000/- to ₹ 20,000/-. However, the existing rate of penalty is being retained under rule 7C of the Service Tax Rules, 1994. The maximum penalty is presently reached after a delay of 40 days. The new limit will impact only those who delay filing of return for longer durations. 4.5 The provisions of section 73 (1A) and both the Provisos of section 73 (2) are proposed for deletion. As a result, the benefit of reduced penalty shall not be available in cases of fraud, mis-statement, suppression, collusion etc. in the ordinary course. However, revised benefit will be available under the new sub-section 4A of section 73 in situations where the true and complete account of transactions is otherwise available in the specified records an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before issue of notice: Section 73(3) On showing reasonable cause under section 80 Cases of fraud, suppression etc. Captured true complete position in records 50% of tax amount: Proviso to Section 78 (a) 1% per month; max of 25% if all dues paid before notice: Sec 73(4A); (b) 25% of tax if all dues paid within 30 days (90 days for small assesses): Provisos to Section 78 -do- Not so captured Equal amount: Section 78 No mitigation at all Not possible From the above explanation, the intention of the new Section 78 clearly emerges, which is to bring a qualitative change in the regime of imposition of penalty on service tax evaders by differentiating between (i) those who had not paid service tax under a mistake bonafide belief that no service tax is payable or incorrect interpretation of provisions of law but had recorded and captured the relevant transactions in their specified records; and (ii) those person's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in Section 38A of the Central Excise Act, 1944. If Provisions of any section are intended to be saved, then the law usually provides for such specific provision, as seen in the case of Sub-Section (5) of Section 73 of the Act, which was substituted w.e.f. 10.9.2004. The said Sub-Section (5) reads as under: (5) The provisions of sub-section (3) shall not apply to any case where the service tax had become payable or ought to have been paid before the 14th day of May, 2003. I find no similar saving provision was inserted in Section 78 of the Act, when it was substituted w.e.f. 8/4/2011, as also reflected in the intension behind substitution of Section 78, as explained above. 11 I have also noticed that since Section 78 of the Act has not been amended, but has been substituted. Therefore, the provisions of Section 78 as they existed prior to 8/4/2011, cannot be applied while imposing penalty under Section 78 of the Act after 8/4/2011. It is settled law that when a new penal provision substitutes an earlier provision, and the offence remains the same, then the earlier legal provision is obliterated. 12. Further, I find that in the present case, the Rule of beneficial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rally both concerning and after the facts committed. But I do not consider any law ex post facto within the prohibition that mollifies the rigour of the criminal law, but only those that create or aggravate the crime, or increase the punishment or change the rules of evidence for the purpose of conviction . There is a great and apparent difference between making an unlawful act lawful and the making an innocent action criminal and punishing it as a crime. 23. To illustrate, if parliament were to re-enact Section 302 of the Indian Penal Code, 1860 and provide that the punishment for an offence of murder shall be sentence for imprisonment for life, instead of the present sentence of death or imprisonment for life, then it cannot be that the Courts would still award a sentence of death even in pending cases. 24. In Rattan Lal vs. The State of Punjab , [AIR 1965 SC 444], the question that fell for consideration was whether an appellate court can extend the benefit of Probation of Offenders Act,1958 which had come into force after the accused had been convicted of a criminal offence. The court by majority of 2:1 answered the question in affirmative. Subha Rao, J, who delive ..... X X X X Extracts X X X X X X X X Extracts X X X X
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