Custom, Excise & Service Tax Tribunal
Capital Color Lab vs Cce Slaem on 9 January, 2009
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No.S/PD/119/08 & S/135/08
[Arising out of Order-in-Revision No.6/2008 (Commr) dated 10.3.2008 passed by the Commissioner of Customs & Central Excise, Salem]
For approval and signature:
Honble Mr.P.KARTHIKEYAN, Member (Technical)
1. Whether Press Reporters may be allowed to see 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 the Member wishes to see the fair copy of
the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
Capital Color Lab
Appellants
Versus
CCE Slaem
Respondent
Appearance:
Shri G.Natarajan, Advocate Shri M.K.A.K.Mohiddin, JDR For the Appellants For the Respondent CORAM:
Honble Mr.P.Karthikeyan, Member (Technical) Date of hearing : 9.1.2009 Date of decision : 9.1.2009 Final Order No.____________ This is an application for waiver of predeposit and stay of recovery of an amount of Rs.52,417/- equal to the service tax imposed under Section 76 of the Finance Act, 1994 (the Act) on the appellants M/s.Capital Color Lab. In an order of the Asst. Commissioner of Central Excise, the appellant was found short paid service tax under the category photography services during the period 1.7.03 to 9.9.04. He demanded short paid tax of Rs.52,417/- and imposed equal penalty under Section 87 of the Act . The liability of the appellants was found in relation to the exemption extended to service providers under Notification No.12/03-ST dt. 20.6.03 found to have been not admissible to the appellants during the material period. This order has been challenged before the Commissioner (Appeals), Salem and the appeal is pending decision. In the meanwhile, the Commissioner (Appeals) Salem initiated review proceedings under Section 84 of the Act and passed the impugned order imposing equal amount of penalty under Section 76 of the Act.
2. Moving the application for waiver of predeposit and stay of recovery, ld. counsel for the appellants submits that the Tribunal has decided in a number of decisions that the Commissioner of Service tax could not enhance the penal liability determined by the adjudicating authority in exercise of his discretion. He relies on the following decisions :-
1) Solomon Foundry Vs CCE Tiruchirapalli 2008 (12) S.T.R. 750 (Tri-Chennai)
2) Mani Engineering Works Vs CCE Salem 2008 (12) S.T.R. 721(Tri.-Chennai)
3) I have also heard the ld. JDR who does not contradict the submissions by the ld. counsel as regards the existence of decisions of the Tribunal about the penal liability of a service provider adjudged in review proceedings. After hearing both sides on the stay application, the appeal paper is taken up for final disposal. In the impugned order, in relation to review proceedings initiated under Section 84 of the Act, the Commissioner imposed a penalty under Section 76 of the Act which the original authority had found not called for in the facts of the case. The liability to differential service tax fastened on the appellants has been challenged and is pending decision by the Commissioner (Appeals). Sub-section (4) of Section 84 of the Act reads as follows :-
(4) No order under this section shall be passed by the Collector of Central Excise in respect of any issue if an appeal against such issue is pending before the Collector of Central Excise Rules (Appeals) In the light of these provisions barring Commissioner of Central Excise to adjudge a liability when the dispute was pending before the appellate Commissioner in the Mani Engineering Works case (supra), the Tribunal decided that the order of the Commissioner imposing penalty not found warranted by the original authority was premature. The order impugned in that case was set aside and the matter remanded for a fresh decision at the appropriate time. In the Solomon Foundry case (supra), relying upon a judgment of the Honble High Court of Karnataka, it was held that penalty not imposed by the Deputy Commissioner in exercise of his discretion could not be imposed by the Commissioner in review proceedings. In view of the ratio of these judicial authorities, the impugned order imposing penalty under Section 76 of the Act on the appellants is not sustainable. Accordingly, the impugned order is set aside and this appeal allowed. Stay application also gets disposed of.
(Dictated and pronounced in open court) (P.KARTHIKEYAN) MEMBER (T) gs 4