Custom, Excise & Service Tax Tribunal
Cce, Jalandhar vs M/S Bhagwati Forex on 12 June, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
West Block No. 2, R.K. Puram, New Delhi 110 066.
Date of Hearing : 12.6.2014
Appeal No. ST/155/2009
[Arising out of Order-in-Appeal No. 04/CE/Appl/Jal/2009 dated 9.1.2009 passed by the Commissioner (Appeals), Central Excise, Jalandhar (Chandigarh)]
For Approval & Signature :
Honble Mr. Justice G. Raghuram, President
Honble Mr. R.K. Singh, Member (Technical)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2.
Whether it would 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 of the order?
4.
Whether order is to be circulated to the Department Authorities?
CCE, Jalandhar Appellant
Vs.
M/s Bhagwati Forex Respondent
Appearance:
Shri Yashpal Sharma, D.R. - for the appellant Shri Sudhir Malhotra, Advocate & - for the respondent Shri A.S. Hasija, Consultant Coram : Honble Mr. Justice G. Raghuram, President Honble Mr. R.K. Singh, Member (Technical) F. Order No. 52472/2014 Per Justice G. Raghuram :
Revenue has preferred the appeal against the order dated 12.1.2009 passed by the Commissioner (Appeals), Chandigarh. The appellate Commissioner partly allowed the appeal preferred by the respondent/assessee against the order dated 31.3.2008 of the Assistant Commissioner, Central Excise, Jalandhar.
2. Proceedings were initiated against the assessee who was engaged in the business of money transfer under an agreement with M/s Western Union Financial Services, USA. Alleging, that the petitioner had provided the taxable Business Auxiliary Services (BAS) to the overseas entity from India and is therefore liable to tax, proceedings were initiated. The primary authority confirmed tax demand of Rs.61,721/- and imposed penalties under Section 75A, Section 76, Section 77 and Section 78 of the Act as well, apart from interest under Section 75.
3. Aggrieved, the assessee preferred an appeal. The ld. appellate Commissioner confirmed the primary order to the extent of the demand of service tax, interest and penalties under Sections 75 and 78 but dropped the penalty imposed by the primary authority under Section 76 on the ground that no penalty simultaneously could be imposed, following the judgement of this Tribunal in The Financers Vs. CCE, Jaipur 2007 (8) STR 7 (Tri.-Del.)
4. The issue of imposition of simultaneous penalties under Sections 76 and 78 was considered by several High Courts and there are conflicting views expressed on this aspect. While High Courts of Kerala and Delhi opined that prior to the amendment w.e.f. 10.5.2008 by a proviso introduced to Section 78, by the Finance Act, 2008, penalties under Sections 76 and 78, which operate on different aspects could be imposed vide Assistant Commissioner of Central Excise Vs. Krishna Poduval - 2006 (1) STR 185 (Ker.) and Bajaj Travels Ltd. Vs. CST 2012 (25) STR 417(Del.), the Punjab & Haryana High Court in CCE Vs. First Flight Couriers Ltd. - 2011-TIOL-67-HC-P&H-ST recorded a contrary view, following its earlier judgement in CCE Vs. Pannu Property dealers and on the ground that since Section 78 is more comprehensive and provide for a higher quantum of penalty, though technically the scope of Section 76 and 77 are different, penalty under Section 76 may not be justified where penalty is already imposed under Section 78. To the same effect is the judgment of Karnataka High Court in CST, Bangalore Vs. Motor World - 2012 (27) STR 225 (Kar.)
5. The Larger Bench of this Tribunal in CCE Vs. Kashmir Conductors - 1997 (97) ELT 257 (T) had occasion to consider the issue as to the decision of which the High Court should be followed in case of conflicting opinions, particularly in the context of the fact that the Tribunal, an all India Tribunal, operates within the territorial jurisdictions of several High Courts and adjudicates disputes arising from different territories. The Larger Bench clarified that the decision of that High Court within whose jurisdiction the issue arises viz. where the taxable event occurs or the jurisdictional Commissioner passes the initial adjudication order, should be followed. Following the guidance provided by the Larger Bench decision in another appeal preferred by Revenue in a case arising from within the jurisdiction of the Punjab & Haryana High Court, we followed the decision of the Punjab & Haryana High Court in First Flight Couriers Ltd. (supra) to hold that simultaneous penalty under Sections 76 and 78 could not be imposed on that assessee whose transactions and cause of action arose within the jurisdiction of that High Court. This decision was recorded in FO No. ST/A/52161/2014-CU(DB) dated 15.5.2014. Following this decision and the analysis contained therein, we dismiss this appeal by Revenue, without costs.
(Justice G. Raghuram) President (R.K. Singh) Member (Technical) RM 2