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TMI Blog2016 (5) TMI 902X X X X Extracts X X X X X X X X Extracts X X X X ..... sed under Section 78 of the Act is reduced to Rs. 14,54,613/- only". 2. The facts of the case is that the appellant are engaged in the activity of providing taxable services, viz. "Manpower Recruitment or Supply Agency Services, Erection, Commissioning or Installation service and Maintenance or Repair Service". After enquiry, on going through the appellants record it was revealed that during the period from 2008-09 to 2011-12 they were providing taxable services of Maintenance & repair of machinery and erection and commissioning, that they had charged and collected service tax from their customers and the service income was accounted under the head job work in their financial Accounts, that they did not file service tax returns during this period. The appellant had paid the entire service tax on the piecemeal during the course of inquiry and also paid the interest on the service tax. The adjudicating authority confirmed the demand and imposed the penalty including the equal amount of penalty under Section 78. In the appeal of the assessee before the Commissioner (Appeals), the Ld. Commissioner (Appeals) reduced the penalty of Section 78 to 50% of the service tax invoking the ame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India Vs. Dharmendra Textile Mills 2008 (231) ELT 3 (SC) As regard party's appeal for waiver of penalty imposed under Section 78 equal to 50% of the service tax amount, she submits that it is not under dispute that the appellant had collected the service tax from their service recipient and not deposited to the Government exchequer, in such case no reasonable cause present in the act of evading payment of service tax. Therefore the appellant do not deserve any leniency. In support, she placed reliance on the following judgments : (i) Indsur Global Ltd. Vs. Additional Commissioner of Service Tax 2015 (38) STR 14 (Guj.) (ii) Master Marine Services Pvt. Ltd. Vs. Commissioner of Service Tax Mumbai 2014-TIOL-612-CESTAT-MUM 5. I have carefully considered the submissions made by the Ld. AR and perused the records. I find that as regard Revenues appeal for imposition of 100% penalty under the erstwhile Section 78 this Tribunal on the identical issue in the case of Commissioner of Central Excise Pune-I Vs. Srikrishna Associate 2016-TIOL-607-CESTAT-MUM passed the following order : 5. On careful consideration of the grounds of appeal, submission made by Ld. A.R. and the findings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined 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 introduced in the Lok Sabha by the Hon'ble Finance Minister, it is done alongwith a Budget Speech by the Hon'ble Finance Minister which explains the intention behind introducing the changes in the Central Excise Act, 1944 and the Finance Act, 1994. The said intention & rationale is reflected in the Budget Speech of Hon'ble Finance Minister made in Lok Sabha on 28/2/2011, as contained in para 192 of the Budget Speech, which is reproduced as below: "192. In keeping with ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te 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 and the assessee during the course of audit, verification or investigation pays the tax dues, together with interest and the reduced penalty. It is clarified that the assessee can also avail this benefit on his own also. The extent of penalty is being further reduced to 1% per month of the tax amount for the duration of default, with an upper ceiling of 25% of the tax amount. 4.6 Interest rate for delayed payment of service tax is being increased to 18% per annum, effective 01.04.2011 (Notification 15/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferentiating 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 who were liable to pay service tax but had not willfully not paid the same by indulging in fraude, mis-statement, suppression, collusion etc. and by not recording and capturing the relevant transactions in their specified records. 9. Thus, in the context of Section 38A of Central Excise Act, 1944, it is clear that when Section 78 of the Finance Act,1994 was substituted w.e.f. 8/4/2011, the intentin in respect of the mechanism for ensuring compliance, by way of imposition of penalty under the provisions of Section 78 of the Act, was different from the intention or rationale as was contained in the said Section 78, as it existed prior to 8/4/2011. Therefore the saving provisions under the said Section 38A of the CEA are not capable of saving the provisions of erstwhile Section 78 of the Act, as they existed prior to their substitution w.e.f. 08.04.2011. 10. IN addition, I have also noticed that what can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 construction is also applicable. In the present case, it is fact that the offence has remained the same, but the effect of the substituted provisions of law has a beneficial effect and in fact that is the ground of the present appeal. The Rule of the Beneficial Construction was upheld by the Hon'ble Supreme Court, in respect of the effect of amendment of law, in the case of T.Barai vs. Henry Ah Hoe [(1983)-1-SSC-177] the relevant portion of which is reproduced as under: "22. It is only retroactive criminal legislation that is prohibited under Art. 20(1). The prohibition contained in Article 20(1) is that no person shall be convicted of any offence except for violation of a law in force at the time of the commission of the act charged as an offence prohibits nor shall he be shall be subjected to a penalty greater than which might have been inflicted under the law in force at the time of the commission of the offe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 delivered a majority opinion, concluded that in considering the question, the rule of beneficial construction required that even ex post facto law of the type involved in that case should be applied to reduce the punishment. 25. It is settled both on authority and principle that when a later statute again describes an offence created by a former statute and affixes a different punishment, or varies the procedure, the earlier statute is repealed by implication. In Michell vs. Brown (1958) 120 SCR 676] Lord Cambel put the matter thus: It is well settled rule of construction that, if a the later statute again describes an offence created by a former statute and affixes a different punishment, varying the procedure, the earlier statute Is repealed by the later statute see also Smith Vs. Benabo [(1937 1 All ER 523]. In Regina vs. Youle, [1961) 158 ER 311] Marin B said in the oft quoted passage: If a statute deals with a particular class ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule or notification is saved. However in the present case, the issue relates to the repeal of Act, i.e. Section 78 therefore this judgment shall not apply. Similarly,the Tribunals order in the case of Lakshmi Packaging Ltd. (supra), the issue relates to the amendement of Notification. The Honble Supreme Court judgement in the case of Rajasthan Spinning and Weaving Mills (supra and Dharmendra Textile Processors (supra). The issue involved is whether the mandatory penalty under Section 11AC can be reduced or otherwise, that is not the issue involved in the present case. On going through the Tribunals order in S.A. Enterprises cases, I find that that order does not deal with application of Section 38A. Therefore all the judgments relied upon by the Ld. AR are not on the identical facts and circumstances, therefore the ratio of the same is not applicable in the present case. The Revenues appeal is not maintainable. As regard assessees appeal for waiver of 50% penalty imposed under Section 78. I find that admittedly the assessee have collected the service tax and not deposited to the Government exchequer. They have also not filed return in respect of the transaction for which ser ..... X X X X Extracts X X X X X X X X Extracts X X X X
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