Custom, Excise & Service Tax Tribunal
Cce, Chandigarh vs Co-Operative Sugar Mills Ltd on 15 May, 2014
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No.2, R. K. Puram, New Delhi, Court No. 1 Date of hearing: 15.05.2014 For Approval and Signature: Honble Mr. Justice G. Raghuram, President Honble Mr. Rakesh Kumar, Member (Technical) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether their Lordships wish to see the fair copy of the Order? 4 Whether Order is to be circulated to the Departmental authorities? Service Tax Appeal No. 821 of 2008 (Arising out of order-in-Appeal No. 494-495/CE/CHD/2008 dated 23.09.2008 passed by the Commissioner (Appeals) Central Excise, Chandigarh). CCE, Chandigarh Appellant Vs. M/s Punjab State Federation Co-operative Sugar Mills Ltd. Respondent
Appearance:
Ms. Suchitra Sharma, Jt. CDR for the assessee Ms. Neetu Singh, C.A. for the Respondent.
Coram:
Honble Mr. Justice G. Raghuram, President Honble Mr. Rakesh Kumar, Member (Technical) Final Order No. 52161 / 2014 Per: Justice G. Raghuram:
Revenue has preferred this appeal against the common order, dated 23.09.2008 passed by the Commissioner (Appeals), Central Excise, Chandigarh, in orderin-appeal Nos. 494-495/CE/CHD/2008.
2. The respondent - M/s Punjab State Federation Co-operative Sugar Mills Ltd., Chandigarh had preferred two appeals No. 219-274 against two orders-in-original dated 21.01.2008 and 25.08.2008 passed by the Assistant Commissioner, Central Excise, Division, Chandigarh confirming service tax demand of Rs. 2,62,311/- and Rs. 1,17,634/- and penalties under Sections 76 and 77 of the Finance Act, 1994. The ld. Appellate Commissioner concluded that penalties cannot be imposed, both under Sections 76 and 78 of the Act; that provisions of these two Sections are mutually exclusive; and therefore simultaneous penalties cannot be imposed under both provisions. Consequent on this conclusion, the learned Appellate Commissioner while confirming imposition of penalty under Section 78 set aside the order of the primary Authority confirming penalty under Section 76 of the Act.
3. We have heard ld. DR for the appellant-Revenue and ld. Consultant Ms. Neetu Singh for the respondent assessee. We notice that there is a conflict of opinion amongst decisions of different High Courts, on the issue whether penalties under Sections 76 and 78 could simultaneously be imposed, prior to the amendment to Section 78, by the Finance Act, 2008, whereby Section 78 was amended to provide that in case where penalty is payable under Section 78, penalty under Section 76 shall not apply. The amendment to Section 78 has come into force w.e.f. 10.05.2008.
4. The issue whether imposition of simultaneous penalties under Sections 76 and 78 of the Act could be imposed, prior to amendment of Section 78 was considered by the High Court of Kerala in Assistant Commissioner of Central Excise vs. Krishna Poduval 2006 (1) STR 185 (Kerala), which ruled that the penalty imposable under Section 76 is for a different purpose than penalty imposable under Section 78; though both the offences may arise in the course of same transaction and for the same Act and that the incidents of imposition of penalty are distinct and separate and therefore penalty is imposable for ingredients of both offences.
5. In Bajaj Travels Ltd. vs. Commissioner of Service Tax 2012 (25) STR 417 (Delhi) the issue before the Delhi High Court was clearly whether in view of the amendment under Section 78 of the Finance Act, 2008, penalty under Sections 76 and 78 could simultaneously be imposed, for periods prior to the amendment. The Delhi High Court agreed the decision of the Kerala High Court in Krishna Poduval and held that simultaneous imposition of penalties under Sections 76 and 78 of the Act is permissible for the pre-amended period.
6. However, the Punjab and Haryana High Court in Commissioner of Central Excise, Commissionerate vs. First Flight Courier Limited 2011-TIOL-67-HC-P&H-ST recorded a contrary conclusion. In First Flight Courier Limited, there was a short remittance of service tax during 01.04.2002 to 31.03.2005. Proceedings were initiated and the assessed service tax was levied alongwith penalties under Sections 76 and 78 of the Act. Against that adjudication order, the assessee preferred an appeal. The appellate Commissioner set aside penalty imposed under Section 76 on the ground that simultaneous penalties under Sections 76 and 78 cannot be imposed. Revenues appeal against the appellate Commissioners order was rejected by this Tribunal. Revenue carried the matter in further appeal to the High Court. The High Court concluded that Section 78 is more comprehensive and provided for a higher quantum of penalty and even if technically the scope of Sections 76 and 78 are different, penalty under Section 76 may not be justified if penalty is already imposed under Section 78. For this conclusion the High Court referred to and followed its earlier judgment in CCE vs. Pannu Property Dealer, Ludhiana, a judgment dated 12.07.2010 in S.T. Appeal No. 13/2010.
7. The present appeal arises out of an adjudication order dated 25.02.2008 passed by the Assistant Commissioner, Chandigarh, a quasi-judicial Authority functioning within the territorial jurisdiction of the Punjab and Haryana High Court. In the circumstances and in view of the decision of a Larger Bench of this Tribunal in Collector of Central Excise vs. Kashmir Conductors 1997 (96) ELT 257 (Tri.), the decision of the Punjab and Haryana High Court within whose jurisdiction the adjudicating authority exercises adjudicatory functions has to be followed and that constitutes the operative law. Consequently, in so far as the respondent assessee is concerned, simultaneous penalties under Sections 76 and 78 cannot be imposed and the judgment of the Appellate Commissioner which is in conformity with the judgment of the Punjab and Haryana High Court in M/s First Flight Courier Limited (supra), is unassailable. As a result, Revenues appeal is without merits and is accordingly dismissed.
(Justice G. Raghuram) President (Rakesh Kumar) Member (Technical) Pant