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TMI BlogPenalty under service taxX X X X Extracts X X X X X X X X Extracts X X X X ..... Penalty under service tax X X X X Extracts X X X X X X X X Extracts X X X X ..... information called by an officer? Reply By KASTURI SETHI: The Reply: Dear Sir, Answer is YES. Penalty under Sections 78 and 76 of the Finance Act cannot be imposed upon simultaneously. Reply By Kaustubh Karandikar: The Reply: thanks kasturi ji for your kind advice. my understanding was, since Section 77 provides for Penalty for contravention of rules and provisions of Act for which no penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty is specified elsewhere and since already penalty had been imposed under section 78 in the SCN, again seperate penalty cannot be imposed. Reply By Alkesh Jani: The Reply: Shri In this regards, my view is, it is obligatory on the part of the department to invoke all applicable penalty provisions, regardless of settled law. It is on the noticee to incorporate the same in the defense reply and f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inally, it is on the adjudicating authority whether to impose penalty or not, under particular provision. Further, the original adjudicating authority cannot drop any penalty or any part, it is only in the hands of appellate authority. Thanks Reply By KASTURI SETHI: The Reply: Sh. Kaustubh Karandikar Ji, W.r.t. my reply dated 20.11.21, I further clarify that the position of imposition of pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty either under Section 78 or 76 of the Finance act remained in force up to 13.5.15. Proviso to Section 78(2) was omitted w.e.f. 14.5.15. Prior to 14.5.15, it was as under : "Provided further that if the penalty is imposed under this section (i.e. Section 78), the provisions of Section 76 shall not apply". W.e.f. 14.5.15, penalty under Sections 76, 77 & 78 could be proposed for impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition upon the offender/evader in the same SCN. I want to say that such like relaxation/leniency of imposing upon penalty either under Section 78 or 76 was never provided/existed for Section 77. Various offences mentioned in Section 77 are not covered in Section 78. If you peruse the history of Section 77 (1)(C), the language remains the same whereas there was changes in Section 77 (1)(a) & (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Kinds of offences remained the same. Moreover, it has never been the intention of legislature to provide relaxation for Section 77. I have seen so many SCNs issued by the department wherein Sections 76, 77 and 78 were invoked in the same SCN. I strongly concur with the views of Sh.Alkesh Jani Ji inasmuch as there is legal as well as logical force in his view. You will find the word,'SHALL& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39; in Sections 76, 77, 78 of the Finance Act. The word,''Shall' has replaced the word, 'may' in Section 77. It is not 'may' now. In other words, penalty is mandatory. Reply By KASTURI SETHI: The Reply: Dear Sir, You have not given your opinion. Do you agree with my latest reply or not ? Reply By Kaustubh Karandikar: The Reply: Kasturi ji sorry for the late resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onse. With your detailed explanation i am convinced that Section 77 and 78 are independent and both the penalties can be levied in the same SCN. Reply By KASTURI SETHI: The Reply: Dear Sir, Thanks & regards. Whenever you do not agree with my views, I feel I am lacking in something. Reply By Alkesh Jani: The Reply: To, Shri Kasturiji Sir, Thanks for your detailed reply backed with legal for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce. This part of my views is not only for erstwhile laws, but for GST also, that officers of department are duty bound to act as per the circular/instruction/ direction given by the Board/higher officer. Moreover, it is their right what to incorporate in SCN or not, we cannot try to put our leg into their shoe. For this purpose, legal remedies are made available by law/constitution. We have seen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that appellate authorities have even dropped the proceeding initiated vide SCN and also set aside the orders of the adjudicating authority. For imposition of penalty, the facts and circumstances are to be taken into account. If some provisions are invoked for which one is aggrieved or dissatisfied, we have appellate authorities. Further, in some cases, the lenient views are adopted by the depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment, during audit, scrutiny etc. by not invoking general penalty, one will not say this is illegal. It is the motto of our jurisdiction system that let 100 guilty may escape but innocent should not be punished. The judges of various court have and had delivered the lenient and responsible judgments, so that our civilised society remains 'civil'. The above views are without prejudice to the view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s one may have. Thanks With Regards. Reply By Amit Agrawal: The Reply: I agree with views of fellow colleagues. Penalty u/s 77(1)(c) is for 'furnish information called by an officer'. And penalty u/s 78 (1) is for 'any service tax has not been levied or paid, or has been short-levied or short-paid, or erroneously refunded, by reason of fraud or collusion or wilful mis-statement o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r suppression of facts or contravention of any of the provisions of this Chapter or of the rules made thereunder with the intent to evade payment of service tax' As these are two different contraventions, Dept. may impose both these provisions to impose penalties while issuing SCN if it feels that both these contraventions happened in a given case. Penalty u/s 78 (1) does not cover contraven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion envisaged u/s 77 (1) (c).
Reply By KASTURI SETHI:
The Reply:
Sh.Alkesh Jani Ji,
I agree with your views entirely. Each phrase, each word and each sentence has significance used by you has its significance.
Reply By KASTURI SETHI:
The Reply:
Pl. read, "Each phrase, each word and each sentence used by you has its significance". X X X X Extracts X X X X X X X X Extracts X X X X
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