Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs Pendharkar Constructions on 5 April, 2011
IN THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
Appeal No. ST/137/10
(Arising out Order-in-Appeal No. AGS (34) 20/2010 dated 15.2.2010 passed by the Commissioner of Central Excise (Appeals), Aurangabad)
For approval and signature:
Honble Mr. 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 Yes 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?
Commissioner of Central Excise, Aurangabad
Appellant
Vs.
Pendharkar Constructions
Respondent
Appearance:
Shri Kishori Lal, SDR for the appellant Shri D.R. Gadekar, Consultant for the respondent CORAM:
Honble Mr. Ashok Jindal, Member (Judicial) Date of hearing : 05.04.2011 Date of decision : 05.04.2011 O R D E R No:..
Revenue is in appeal against the order of dropping the penalty under Section 76 of the Finance Act, 1994.
2. A show-cause notice was issued to the respondent alleging that the respondent have failed to pay the service tax for providing services classified as construction of residential complexes as the respondent has crossed threshold limit of Rs.8 lakhs for the year 2007 and were liable to pay service tax after allowing the benefit of exemption under Notification 6/05 ST as amended from time to time. Thereafter, demands were determined along with interest and penalties were also imposed under Section 76, 77 and 78 of the Finance Act, 1994. Aggrieved from the said order, respondent preferred an appeal before the Commissioner (Appeals), who modified the order by dropping the penalty under Section 76 ibid holding that the fifth proviso of Section 78 ibid provides that if penalty is paid under Section 78 ibid, the provisions of Section 76 shall not apply. Aggrieved from the said order, revenue is in appeal.
3. The ld. DR submitted that penalty under Section 76 and 78 are two distinct and separate penalties for two offences. Under Section 76, the penalty can be imposed for failure to pay service tax by person who is liable to pay, whereas the penalty under Section 78 relates to penalty for suppression of value of taxable service. In this case the both offences have been committed by the respondent, therefore, respondent are liable to penalise under both the sections i.e. under Section 76 and Section 78 ibid. To support his contention he placed reliance on Aakriti Cable Network vs. CCE Jaipur 2009 (15) STR 338 and ACC vs. Krishna Poduval 2006 (1) STR 185 (Ker.) He further submitted that proviso 5 to section 78 has came into force with effect from 10.5.2008 therefore the period prior to 10.5.2008 the benefit of proviso 5 to Section 78 is not available to the respondent. Hence impugned order is to be set aside.
4. On the other hand, the authorised representative of the respondent submits that in this case the period involved is 2007 to February 2009 and when the show-cause notice was issued the proviso 5 to Section 78 was in existence. He further relied on the decision of CCE vs. Silver Oak Gardens Resort reported in 2008 (9) STR 481, CCE vs. Punnu Property Dealer 2009 (14) STR 635 (Tri-Del), CST vs. Y.Sunil 2010 (17) STR 558 (Tri-Bang).
5. Heard both sides.
6. The short issue involved in this case is that when the penalty under Section 78 of the Finance Act has been confirmed, whether penalty under Section 76 ibid is leviable or not in the facts and circumstances of the case.
7. After going through the facts of the case, I find that in this case show-cause notice has been issued after coming into force proviso 5 to section 78 ibid, as per that proviso 5 to Section 78 ibid if penalty under Section 78 ibid is imposed, penalty under Section 76 ibid is not imposable. The decisions relied by the ld. DR are for the period prior to introduction of proviso 5 to Section 78 ibid. Therefore, they are not relevant to the facts of this case. As the show-cause notice has been issued when the provision of proviso 5 to Section 78 ibid were in force, therefore as held by the lower appellate authority, the penalty under Section 76 ibid is not imposable when penalty under Section 78 ibid is imposable. Therefore, I do not find any infirmity in the impugned order, same is upheld. Appeal filed by the revenue is rejected.
(Operative part pronounced in Court) (Ashok Jindal) Member (Judicial) SR ??
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