Custom, Excise & Service Tax Tribunal
Fibrex Industries vs Cce Aurangabad on 12 May, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT NO. II
APPEAL NO. ST/853/12 Mum
(Arising out of Order-in-Appeal No. AV(162)159/2012 dated 26.09.2012 passed by the Commissioner of Central Excise, Customs & Service Tax (Appeals), Aurangabad)
For approval and signature:
Honble Shri Ashok Jindal, Member (Judicial)
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Yes
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
Fibrex Industries
:
Appellant
Versus
CCE Aurangabad
Respondent
Appearance Shri S.B. Awate, Consultant For appellants Shri D.D. Joshi, Supdt (A.R.) For Respondents CORAM:
Shri Ashok Jindal, Member (Judicial) Date of Hearing : 12.05.2014 Date of Decision : 12.05.2014 ORDER NO.
Per Ashok Jindal The appellant is in appeal against the impugned order for confirming the penalties imposed against them under Section 76, 77 and 78 of the Finance Act, 1994.
2. Brief facts of the case are that during the period 2006-07 to 2009-2010, the appellant was providing the services of glasswool coating to the sugar factories. At the time of audit in a sugar factory, it came to the knowledge of the department that the sugar factory has received these services from the appellant on which the appellant has not paid the service tax with the department. The appellant has also obtained registration with the department. Immediately, on pointing out by the department, the appellant paid the service tax along with the interest and also paid the remaining amount during the course of proceedings. Later-on, a show-cause notice was issued for demanding the service tax along with interest and penalties under Sections 76, 77 and 78 of the Finance Act, 1994. Both the lower authorities confirmed the demand of service tax along with the interest and imposition of penalties under Section 76, 77 and 78 of the Act ibid. Aggrieved by the order, the appellant is before me.
3. Heard both sides.
4. The learned Consultant appearing on behalf of the appellant submits that the appellant is not disputing the liability of service tax and the interest. They are only disputing the levy of penalties imposed under Section 76, 77 and 78 of the Finance Act. It is contended on behalf of the appellant that the penalties under Section 76 and 78 of the Finance Act were imposed simultaneously. As per the decision of the Honble Karnatka High Court in the case of Commissioner of Service Tax, Bangalore vs. Motor World - 2012 (27) STR 225 (Kar.), penalties under Section 76 and 78 cannot be imposed simultaneously. He further submits that as the appellant has paid the service tax along with interest before adjudication, as per the provisions to Section 11AC of the above Central Excise Act, 1944, no option has been given to the appellant to pay 25% of duty as penalty. Therefore, penalty under Section 78 be reduced to 25% of the Service tax.
5. The learned A.R. appearing for the Revenue reiterated the impugned order.
6. Considered the submissions made by both the sides.
7. As held by the Honble Karnataka High Court in the case of Motor World (supra) penalties under Section 76 and 78 cannot be imposed simultaneously. Therefore, penalty imposed under Section 76 is dropped. Further I find that no option was given to the appellant to pay 25% of duty as penalty. As they have paid the service tax along with interest before the issuance of show-cause notice, as per the provisions of Section 11AC of the Act, the penalty is reduced to 25% of duty which is to be paid within 30 days from today failing which they would be liable to pay 100% of the duty amount as penalty.
8. Appeal is disposed of in the above terms.
(Dictated in Court) (Ashok Jindal) Member (Judicial) nsk ??
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