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TMI Blog2020 (3) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... are more general in nature get restricted by the other words used therein. However the said principles are not applicable when the words used in the statute are simple plain and clear. In the SIDDESHWARI COTTON MILLS (P) LTD. VERSUS UNION OF INDIA AND ANR. [ 1989 (1) TMI 126 - SUPREME COURT] , Hon ble Supreme Court has applied the principle of Ejusdem Generesis for interpreting the phrase like or any other process - It is not the case herein wherein separate identifiable words have been used in the definition clause. Hence following the decision of Hospital Mazdoor Sabha, supra we hold that the said principles of Noscitur a Sociis and Ejusdem Genersis to be not applicable in the present case. Relying on the explanation to Section 65(104c) and the decision of the tribunal in the case of M/S. AIR LIQUIDE NORTH INDIA PVT. LTD. VERSUS C.C.E. JAIPUR [ 2017 (6) TMI 476 - CESTAT NEW DELHI] and DISH T.V. INDIA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, NOIDA [ 2015 (9) TMI 785 - CESTAT NEW DELHI] appellants have argued that for the service to be considered as infrastructural support service , office should have been provided along with various other facilities - In our v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the argument of revenue neutrality was to be considered a valid argument under the scheme of Finance Act, 1994, then entire provisions relating to payment of service tax on reverse charge will become otiose and every service recipient will claim that what so ever service tax he pays on reverse charge basis will be available to him as CENVAT Credit. Argument of revenue neutrality thus would not be available in case where the service tax is demanded by the recipient of service on the reverse charge basis - the demand made in this Show Cause Notice by invoking the extended period of limitation as per proviso to Section 73(1) of Finance Act, 1994 is upheld. Demand of interest made from them in terms of Section 75 of Finance Act, 1994 - HELD THAT:- The demand is not justified - reliance can be placed in the case of COMMR. OF SERVICE TAX, AHMEDABAD VERSUS PEPSI COLA INDIA MARKETING CO. [ 2007 (8) TMI 51 - CESTAT, AHMEDABAD] . Interest under Section 11AB and penalty under Section 11AC of the Central Excise Act, 1944 - HELD THAT:- Since the invocation of extended period of limitation in respect of the show cause notice dated 08.04.2013 is upheld, the penalties imposed under Section 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) I impose penalty of ₹ 10,000/- (Rupees Ten Thousand Only) under Section 77 of the M/s Sahara India T V Network, Mumbai 400104. 48.4(a) M/s Sahara India T V Network, Mumbai 400104, shall also pay appropriate late fee for each return at the rate specified in Rule 7C of the Service Tax Rules, 1994 during the relevant period, subject to a maximum of ₹ 20,000/- (Rupees Twenty Thousand only), specified under Section 70 of the Finance Act, 1994, for their failure to file periodical returns. 48.5(a) I impose penalty of ₹ 3,94,10,566/- (Rupees Three Crore Ninety Four Lakhs Ten Thousand Five Hundred and Sixty Six Only) on M/s Sahara India T V Network, Mumbai 400104, under Section 78 of the Finance Act, 1994 II. Statement of Demand/SCN under Section 73(1A) of The Finance Act, 1994 issued under F.No ST-II/Dn- IV/Gr.II/Shara/04/EA2000/SCN12-13/2013-14 dated 07.04.2014 amounting to ₹ 1.41,31,667/- for the period June 2012 to June 2013 48.1(b) I confirm, in terms of Section 73(2) of the Finance Act, 1994, the demand of Service Tax of ₹ 1,41,31,667/- (Rupees One Crore Forty One Lakhs Thirty One Thousand Six Hundred and Sixty Seven Only) mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any establishment in India, Appellant was required to discharge the service tax liability as recipient of the services as per Section 66A of the Finance Act, 1994 read with Rule 3(iii) of the Taxation of Services (Provided from outside India and received in India) Rules, 2006. 2.5 By not discharging the service tax liability in respect of the services so received by them appellant had contravened various provisions of Finance Act, 1994 and Service Tax Rules, 1994. Thus a Show Cause Notice dated 08.04.2013 was issued to them asking them to show cause as to why:- Service tax amounting to ₹ 3,94,10,566/- not paid by them in respect of the said services received by them during the period April 2008 to June 2012 should not be demanded and recovered from them by invoking proviso to Section 73(1) of the Finance Act, 1994; Interest on the amounts of service tax not paid by the due date be not demanded and recovered at appropriate rate as per Section 75 of the Finance Act, 1994 Penalty under Section 77 and 78 of the Finance Act, 1994 should not be imposed on them. 2.6 For the subsequent period June 2012 to June 2013, a statement of demand as per Section 73(1A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29A) of the Constitution of India, such transaction of transfer of right to use is deemed to be sale and thus not leviable to service tax. In case of Imagic Creative Ltd [2008 (9) STR 337 (SC)] it has been held that if the transaction is considered as sale , it cannot be considered as service . Hon ble Karnataka High Court has in case of Antrix Corporation Ltd [2010-TIOL-15-HC-Kar-CT] held that leasing of transponder of INSAT Satellites amounts to transfer of right to use the goods. Hence, their agreement with AsiaSat is a transaction for sale and no service tax is payable. There is duplication of demand as the demand of same service tax in respect of the payments made to AsiaSat was also made by Commissioner Central Excise NOIDA. The demand confirmed is under challenge before CESTAT Allahabad. Parallel proceedings cannot be pursued for the same matter pertaining to the same period as per the following decisions Paro Food Products [2005 (184) ELT 50 (T-Bang)] Solitaire Machine Tools Ltd [2008 (222) ELT 404 (TAhmd)] Once CESTAT has confirmed the order and upheld the jurisdiction of the NOIDA Commissionerate in the matter then the same service cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urse of arguments on appeal. 4.2 The matter was earlier heard by the co-ordinate bench and written submissions dated- 10th October 2018 and 29th October 2018 were made by the appellant counsel; 18.12.2018 were made by the learned Authorized Representative; These written submissions have also been taken on record while considering the matter. 4.3.1 Appellants have during the course of hearing submitted a chart showing the duplication of demand by way of Show Cause Notice issued by NOIDA Commissionerate and that issued by the Mumbai Commissionerate. We reproduce the relevant extract of chart as produced by the appellant counsel below: Payment Date SN of Annexure to SCN Amount (Inclusive of TDS) Service Tax Demand Remark Mumbai Noida Mumbai NOIDA Mumbai Noida 16.04.08 1 9 15104554 16894580 1866923 2088170 1 10.07.08 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nadvertently not disclosed to officers in Mumbai 2 Mumbai demanded Service Tax @ 10.30% while NOIDA @ 12.36% 3 Additional TDS of ₹ 111259/- paid after providing the amounts to officers at NOIDA 4 Additional TDS of ₹ 111259/- paid after providing the amounts to officers at NOIDA 5 Additional TDS of ₹ 116721/- paid after providing the amounts to officers at NOIDA 4.3.2 Counsel for the appellants have submitted that the there has been duplication of demand, as indicated above and in the case CESTAT Allahabad, has by deciding the issue in respect of these demands conferred the jurisdiction in respect of this issue to the Noida Commissionerate. Hence the demands made by Mumbai Service Tax Commissionerate are not sustainable in respect of the same issue. 4.3.2 We have seen the order of CESTAT Allahabad, [Final Order No 71339/2018 dated 5.07.2018]. In the said order we do not find any such plea of jurisdiction being raised or being considered by the tribunal. Even if CESTAT Allahabad has passed the said order it cannot be said that they have conferred the juri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... la Mill Compound, Lower Parel, Mumbai 400,000 2 AS3S/048/08 21.02.2008 400,000 3 AS3S/399/08 21.04.2008 400,000 4 AS3S/324/08 21.10.2008 Sahara India Commercial Corporation Ltd Sahara India T V Network Sahara India Point, CTS 40-44, S V Road, Goregaon (West) Mumbai. 400,000 5 AS3S/043/09 21.01.2009 400,000 6 AS3S/141/09 14.04.2009 400,000 7 AS3S/253/09 15.07.2009 400,000 8 AS3S/365/09 20.10.2009 400,000 9 AS3S/163/10 10.05.2010 487,500 10 AS3S/254/10 12.07.2010 487,500 11 AS3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. These facts clearly show the existence of the premises indicated on the invoices issued by M/s AsiaSat and mentioned at Sl No 1 to 14 as separate registrant for the purpose of providing taxable service and registered in the jurisdiction of Mumbai Commissionerate. In our view the jurisdiction in respect of these 14 invoices to demand service tax on reverse charge basis vests with the Mumbai Commissionerate only. In respect of the invoices mentioned at Sl No 15, 16 17 which are in the name of the appellants registered premises as per the registration certificate issued by the Noida Commissionerate the jurisdiction will vest with the Noida Commissionerate, accordingly demand in respect of these invoices made by the Mumbai Commissionerate needs to be deleted. 4.3.7 Counsel for the appellant have relied upon the decision of Hon ble Apex Court in case of Sayed Ali [2011 (265) ELT 17 (SC)] to argue that for exercising power, the officer should have proper jurisdiction, if there is no jurisdiction then it cannot issue show cause notice. The relevant para of the said decision is reproduced below: 14.From a conjoint reading of Sections 2(34) and 28 of the Act, it is manifest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hip management services, accounting and processing of transactions, operational assistance for marketing, formulation of customer service and pricing policies, infrastructural support services and other transaction processing. Explanation -For the purposes of this clause, the expression infrastructural support services includes providing office along with office utilities, lounge, reception with competent personnel to handle messages, secretarial services, internet and telecom facilities, pantry and security; Section 65 (105) (zzzq) of the Finance Act, 1994 Taxable Service means any service provided or to be provided to any person, by any other person, in relation to support services of business or commerce, in any manner; 4.4.2 Revenue has sought to classify the said service under this category by holding that the service provided by the AsiaSat to the Appellant is infrastructural support services . Commissioner has in his order in para 17 to 23 of impugned order Commissioner has observed as follows: 17 The Show Cause Notice alleges that the activity undertaken is provision of infrastructural support under Business Support Services. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business or commerce gives indicative list of outsourced services. 21. The CBEC vide Circular No 109/3/2009-ST dated 23.02.2009 further clarified that Business Support Service is a generic service of providing support to the business or commerce of the service receiver. In other words, the principal activity is to be undertaken by the client while the service received is to support the business or commerce of the recipient. Thus the infrastructural support services are those services which are often outsourced and used for the business activity undertaken by the client. 22. In the instant case, the noticee applied for and obtained Service Tax registration for providing Broadcasting service. The noticee entered into an agreement with M/s Asia Satellite for hiring C-band transponder on AsiaSat 3S satellite. The said transponder was meant for use for uplinking the programme to be broadcasted. In other words, the noticee outsourced the space in C-band transponder for provision of Broadcasting Service. The noticee is entitled to treat the said service as input service used for providing the output service namely Broadcasting service. The Noticee have not denied havin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich are susceptible of analogous meaning are coupled together they are understood to be used in their cognate sense. They take as it were their colour from each other, that is, the more general is restricted to a sense analogous to a less general. The same rule is thus interpreted in Words and Phrases (Vol. XIV, P. 207): Associated words take their meaning from one another under the doctrine of noscuntur a sociis, the philosophy of which is that the meaning of a doubtful word may be ascertained by reference to the meaning of words associated with it; such doctrine is broader than the maxim Ejusdem Generis. In fact the latter maxim is only an illustration or specific application of the broader maxim noscuntur a sociis . The argument is that certain essential features or attributes are invariably associated with the words business and trade as understood in the popular and conventional sense, and it is the colour of these attributes which is taken by the other words used in the definition though their normal import may be much wider. We are not impressed by this argument. It must be borne in mind that noscuntur a sociis is merely a rule of construction and it cannot prevail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construction, control and limit the meaning of the subsequent words must represent a genus or a family which admits of a number of species or members. If there is only one species it cannot supply the idea of a genus. In the present case the expressions bleaching, mercerising, dyeing, printing, water-proofing, rubberising, shrink-proofing, organdie processing' which precede the expression 'or any other process' contemplate processes which impart a change of a lasting character to the fabric by either the addition of some chemical into the fabric or otherwise. 'Any other process' in the section must, share one or the other of these incidents. The expression any other process is used in the context of what constitutes manufacture in its extended meaning and the expression unprocessed in the exempting notification draws its meaning from that context. The principle of construction considered appropriate by the Tribunal in this case appears to us to be unsupportable in the context in which the expression or any other process has to be understood. It is not the case herein wherein separate identifiable words have been used in the definition clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e classified under the category of infrastructure support service . Nor do the explanation to Section 65(104c) state so. In the case of South Gujarat Roofing Tiles Manufactures, relied upon by the bench while passing the said decision, Hon ble Supreme Court was interpreting the entry 22 of Minimum Wages Act, 1948 and held that the items included in it were plainly comprised in the expression potteries industry which showed that the word includes was not to extend the normal meaning of this expression. The conclusion was that the word includes was used in the explanation in the sense of means and the definition provided by the explanation was exhaustive. From the explanation, it is evident that infrastructure support service has been defined using the phrase includes and not the word, means . Hon ble Supreme Court has in case of Rajasthan Texchem Ltd [2007-TIOL-08-SC-CT] held as follows: .The word includes gives a wider meaning to the words or phrases in the Statute. The word includes is usually used in the interpretation clause in order to enlarge the meaning of the words in the statute. When the word include is used in the words or phrases, it must be construed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siaSat s ability to co-ordinate the satellite with other satellite operators. Following receipt of such details, AsiaSat shall promptly notify the Customer in writing whether the transmission plans are acceptable to AsiaSat and, if not, shall notify the Customer in sufficient detail to enable the Customer to amend the transmission plans and submit such amendments until final acceptance by AsiaSat. Thereafter, the Customer shall not amend, modify or alter its transmission plans (which shall include a change of plans due to migration to Substitute Transponder Capacity or transponder capacity on any Replacement Satellite) without AsiaSat s prior approval and AsiaSat shall respond with reasonable promptness to requests from the Customer to approve amended transmission plans. 2.4 The Transponder Capacity shall be provided to the Customer on a non-pre-emptible basis, meaning that the Transponder Capacity will not be subject to deliberate interruption or cessation of availability by AsiaSat and will only be provided with the protection as set out in clause 7.2. Notwithstanding the foregoing, the Customer acknowledges that AsiaSat may pre-empt or interrupt the Customer s being availe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ble Karnataka High Court has in case Indus Tower Ltd [2012 (285) ELT 3 (Kar)] specifically held that such transaction is not within the ambit of Article 366 (29A)(d) of the Constitution of India. Hon ble High Court has held as follows: 63.The right conferred by the assessee on the mobile operator is in the nature of a personal right granted to him to do something upon the passive infrastructure belonging to the assessee. It does not amount to creation of an interest in the passive infrastructure itself. It is purely a permissive light and is personal to the grantee. The licence has no other effect than to confer a liberty upon the licensee to go upon the land which would otherwise be unlawful. A dominant legally creating leave and licence in favour of the licensee cannot create encumbrance on the immoveable property for the simple reason that whenever the licence is created in favour of the licensee, the licensee is always treated to be in permissive possession. He is given only an authority to enter into the premises. The possession is always with the licensor. Only entry in the premises is made legal. It does not create any title in favour of the licensee. A licence is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be remedied and the object sought to be achieved by the said provision cannot be lost sight of. In that background, in the facts of this case, if we look into the various terms of the agreement it is clear under the contract, the assessee has not transferred any right in the passive infrastructure to the mobile operators. The right that is conferred on the mobile operator is a permission to have access to the passive infrastructure, a permission to keep the active infrastructure in the site belonging to the assessee, a permission to mount the antennae on the tower erected by the assessee and to have the benefit of a particular temperature so as to operate the equipments belonging to the mobile operator. No sale of goods or transfer is involved in the transaction in question. Therefore, it does not fall within the mischief of Article 366(29A)(d) of the Constitution as held by the learned Judge as well as the assessing authority. Therefore, the impugned order passed by the learned single Judge as well as the assessing authority cannot be sustained. 4.4.7 In case of Indus Tower, Limited [2014 (35) STR 459 (Del)], Hon ble Delhi High Court has held as follows: 16. The ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld have the right to use the passive infrastructure if they were in lawful possession of it. There has to be, in that case, an act demonstrating the intention to part with the possession of the passive infrastructure. There is none in the present case. The passive infrastructure is an indispensible requirement for the proper functioning of the active infrastructure which is owned and operated by the sharing telecom operators. The passive infrastructure is shared by several telecom operators and that is why they are referred to as sharing telecom operators in the MSA. The MSA merely permits access to the sharing telecom operators to the passive infrastructure to the extent it is necessary for the proper functioning of the active infrastructure. The MSA also defines site access availability as meaning the availability of access to the sharing operator to the passive infrastructure at the site. Clause 2 of the MSA which has been quoted above provides for site access and Clause 1.7 limits the site access availability to the sharing operator on use - only basis so far as it is necessary for installation, operation and maintenance etc. of the active infrastructure; the clause furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se therein. What is permitted under the MSA is a licence to the telecom operators to have access to passive infrastructure and a permission to keep equipments of the sharing telecom operator in a prefabricated shelter with provision to have ingress and aggress only to the authorised representatives of the mobile operator. 4.4.8 Hon ble Madhya Pradesh High Court has in case of Bharti Infratel Ltd [2018 (17) GSTL 225 (MP)](Affirmed by Hon ble Supreme Court as reported in {2018 (17) GSTL J51 (SC)] held as follows: 35. We are in respectful agreement with the view taken by the Karnataka High Court in the judgment sited (supra). The right to use the goods - in this case, the right to use the passive infrastructure - can be said to have been transferred by the petitioner to the sharing telecom operators only if the possession of the said infrastructure had been transferred to them. They would have the right to use the passive infrastructure if they were in lawful possession of it. There has to be, in that case, an act demonstrating the intention to part with the possession of the passive infrastructure. There is none in the present case. The passive infrastructure is an indisp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tructure support services for supporting the business of broadcasting services undertaken by the appellants. Thus these services are appropriately classifiable as Business Support Services by the Section 65(104c) of the Finance Act, 1994 and taxable as per Section 65 (105)(zzzq) ibid. 4.4.11 Since the service provider i.e. M/s AsiaSat do not have any fixed business establishment in India, appellants as recipient of service are required to discharge the service tax liability as per Section 66A of the Finance Act, 1994 read with Rule 3(iii) of the Taxation of Services (Provided from outside India and received in India) Rules, 2006. 4.5.1 Appellants have argued that certain portion demand made vide show cause notice issued from F No. STII/ Audit/Gr.6/98/SITV/11-12/Pt.I dated 08.04.2013 is barred by limitation. The only argument advanced by the appellant against the invocation of extended period of limitation for making the demand is that the issue is completely revenue neutral as any service tax paid by them on the basis of reverse charge as recipient of service would be available to them in the form of CENVAT Credit. Thus they do not gain anything by having not paid the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they failed to declare the correct value of the taxable services received by them from their foreign service provider; they have not assessed the Service Tax correctly and not paid the same within the time limit prescribed; they have not furnished to the Department ST- 3 returns-with the full and correct details of services rendered by them and thereby willfully contravened the provisions of law with intent to evade payment of due Service Tax. 40. Requirement under law to file proper ST-3 returns with full disclosure is not a mere procedural formality but a statutory requirement. In the instant case, the Noticee has not paid Service Tax on the value (amounts) paid by them as consideration for taxable service, classifiable under 'Business Support Service' services received from their foreign service provider, viz., AsiaSat. The department had no knowledge of such non-payment of Service Tax, as the activities were never declared to the department. Had it not been for the EA-2000 audit conducted on the records of the noticee, the above mentioned facts would not have come to the notice of the department. The noticee, being a registered Service Tax assessee, being well awa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collecting procedure which provides relief to the manufacturer on the duty element borne by him in respect of the inputs used by him. The relief is given under the modvat scheme on the actual payment of duty on the input. On such payment, the assessee gets a right to claim adjustment/set-off against the duty on the final product. The question of duty adjustment/set-off against duty on the final product was not in issue. In any event, no record on credit entitlement was produced. A right to claim proforma/modvat credit against duty on final product was different from the defence of bonafides in a case where circumstances mentioned in the proviso to section 11A(1) stands proved by the department for invoking larger period of limitation. The burden to prove the defence of bonafides was on the assessee and the assessee in this case has failed to prove its bonafides. Under modvat, excisable finished products made out of duty-paid inputs are given relief of excise duty to the extent of duty paid on inputs. In the circumstances, we are satisfied that the department was justified in invoking the extended period of limitation under the proviso to Section 11A(1). 4.5.6 Thus we uphold t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purpose on the part of the assessee and that is why in that case, there is no discretion to impose penalty lesser than 100% or 25% in case duty determined is paid within 30 days from the date of determination. The distinction of civil liability and criminal liability stands further demonstrated by Explanation (1) to subsection (2B) of Section 11A, which reads thus : Explanation (1): Nothing contained in this sub-section shall apply in a case where the duty was not levied or was not paid or was short levied or was short paid or was erroneously refunded by reason of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of this Act or of the Rules made thereunder with intent to evade payment of duty. 8. The ratio laid down in the matter of Rashtriya Ispat Nigam Ltd. v. Commissioner of Central Excise, Visakhapatnam - 2003 (161) E.L.T. 285 (Tri.-Bang.), relied upon by learned Counsel for assessee, which view was confirmed by the Hon ble the Apex Court while dismissing the appeal of the department, that in case the duty is paid before issuance of show cause notice, no penalty u/s. 11AC is imposable, was a dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01 with effect from 11-5-2001. As already discussed hereinabove, there is no discretion with the authorities to impose any lesser penalty than 100% and 25% in case duty after being determined u/s. 11A(2), the assessee pays it within 30 days. This answers both the substantial questions of law on which appeal is admitted, so far as penalty imposable u/s. 11AC is concerned. 9. 10. So far as interest u/s. 11AB is concerned, on reference to text of Section 11AB, it is evident that there is no discretion regarding the rate of interest. Language of Section 11AB(1) is clear. The interest has to be at the rate not below 10% and not exceeding 36% p.a. The actual rate of interest applicable from time to time by fluctuations between 10% to 36% is as determined by the Central Government by notification in the Official Gazette from time to time. There would be discretion, if at all the same is incorporated in such notification in the gazette by which rates of interest chargeable u/s. 11AB are declared. The second aspect would be whether there is any discretion not to charge the interest u/s. 11AB at all and we are afraid, language of Section 11AB is unambiguous. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iable to penalty under Section 77 of the Finance Act, 1994. For the reason of not filing Service Tax Returns, they are also liable to pay appropriate late fee as specified under Rule 7e of Service Tax Rules, 1994 subject to ceiling of ₹ 20,000/- each Return, provided under Section 70 of the Finance Act, 1994. Penalty under Section 77 are civil in nature and are imposed for infractions noticed. Hon ble Supreme Court has in case of Gujarat Travancore Agency vs. Commissioner of Income Tax [1989 (42) ELT 350 (SC)], Hon ble Supreme Court held as under: 4. .In most cases of criminal liability, the intention of the Legislature is that the penalty should serve as a deterrent. The creation of an offence by Statute proceeds on the assumption that society suffers injury by and the act or omission of the defaulter and that a deterrent must be imposed to discourage the repetition of the offence. In the case of a proceeding under Section 271(1)(a), however, it seems that the intention of the legislature is to emphasise the fact of loss of Revenue and to provide a remedy for such loss, although no doubt an element of coercion is present in the penalty. In this connection the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons, especially since the ingredients of the two offences are distinct and separate. Perhaps invoking powers under S. 80 of the Finance Act, the appropriate authority could have decided not to impose penalty on the assessee if the assessee proved that there was reasonable cause for the said failure in respect of one or both of the offences. However, no circumstances are either pleaded or proved for invocation of the said Section also. In any event we are not satisfied that an assessee who is guilty of suppression deserves such sympathy. As such, we are of opinion that the learned Single Judge was not correct in directing the 1st appellant to modify the demand withdrawing penalty under S. 76. Therefore, the judgment of the learned Single Judge, to the extent it directs the first appellant to modify Ext. P1 by withdrawing penalty levied under S. 76, is liable to be set aside and we do so. The cumulative result of the above findings would be that the Writ Petitions are liable to be dismissed and we do so. However, we do not make any order as to costs. Thus in our view penalty imposed under Section 76 is justified. 4.11 Since on the issue in question appellants have not place ..... X X X X Extracts X X X X X X X X Extracts X X X X
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