Custom, Excise & Service Tax Tribunal
4. Whether Order Is To Be Circulated To ... vs M/S Powertek Engineers on 10 September, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT AHMEDABAD
COURT - I
Appeal No.ST/418/2012-SM
Arising out of: OIA No.CS/51/DMN/SDMN/2012-13, dt.29.06.2012
Passed by: Commissioner of Central Excise & Customs (Appeals), Vapi
For approval and signature:
Mr. H.K. Thakur, Honble Member (Technical)
1. Whether Press Reporters may be allowed to see the No
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 of Seen
the order?
4. Whether order is to be circulated to the Departmental Yes
authorities?
Appellant:
M/s Powertek Engineers
Respondent:
CCE Daman Represented by:
For Assessee: Shri D.K. Trivedi, Adv.
For Revenue: Shri G.P. Thomas, A.R. CORAM:
MR. H.K. THAKUR, HONBLE MEMBER (TECHNICAL) Date of Hearing:13.09.13 Date of Decision:
ORDER No. /WZB/AHD/2013, dt. Per: H.K. Thakur
This appeal has been filed by the appellant against OIA No.CS/51/DMN/SDMN/2012-13, dt.29.06.2012. The issue involved is whether penalties under Section 76 and 78 can be simultaneously imposed upon the appellant before 10.05.2008 when a proviso was added to Section 78 to the effect that if penalty under Section 78 is imposed then no penalty under Section 76 of Finance Act, 1994 is imposable.
2. Shri D.K. Trivedi (Adv.), appearing on behalf of the appellant argued that amended proviso added to Section 78 of Finance Act, 1994 is also applicable to the period prior to 10.05.2008 in view of the following judgments:
a) 2010 (19) STR 143 (Commissioner Appeals)
b) 2009 (14) STR 687 (Tri-Del)
c) 2008 (9) STR 481 (Tri-Del)
d) 2007 (8) STR 7 (Tri-Del) 2.1 It was further argued by him that as per amended judgment in the case of Jivant Enterprise Vs CST Ahmedabad [2012 (28) STR 582 (Tri-Ahmd)] the amended provision of Section 78 will be applicable to this case as the show cause notice was issued after 10.05.2008. Therefore, proviso added to Section 78 will also be applicable to the period prior to 10.05.2008 when show cause notice is issued after 10.05.2008. For this argument, he relied upon the following case laws, in addition to the case of Jivant Enterprises Vs. CST Ahmedabad (supra).
a) ATMA Steels Pvt.Ltd. & Ors Vs. CCE Chandigarh & Ors.
[1084 (17) STR 331 (Tribunal-LB)]
b) CCE Madurai Vs. Sun Paper Mills, Cheranmahadevi [1985 (20) ELT 120 (Tribunal)]
c) Aneja Property Dealer Vs. CCE Ludhiana [2009 (13) STR 266 (Tri-Del)]
d) Viking Tours & Travels Vs. CST Chennai [2011 (22) STR 69 (Tri-Che.)]
e) Prompt Services Vs. CCE Bolpur [2011 (23) STR 523 (Tri-Kolkata) ]
3. Shri G.P. Thomas, (A.R.) appearing on behalf of the Revenue argued that in view of the following case-laws, proviso added to Section 78 w.e.f. 10.05.2008 cannot be given retrospective effect:-
a) Anand Dicorators & Hirers Vs. CST Ahmedabad [2013 (30) STR 86 (Tri-Ahmd)]
b) CCE Vs. Port Officer [2010 (257) ELT 37 (Guj.]
c) CCE Mumbai-I Vs. Lal Mining Engg. Works [2007 (215) ELT 167 (SC)]
d) CCE Coimbatore Vs. ELGI Equipments Ltd.
[2001 (128) ELT 52 (SC)]
e) Asstt.Commissioner of Central Excise Vs. Krishna Poduval [2006 (1) STR 185 (Ker.)]
f) Bajaj Travels Ltd. Vs. CST [2012 (25) STR 417 (Del.)]
g) British Airways PLC Vs. CST, New Delhi [2013 (29) STR 177 (Tri-Del)] 3.1 It was argued by the Advocate of the appellant as a counter that as per Para 21 of the Gujarat High Court judgment in the case of Bajaj Travels Ltd. Vs. CST [2012 (25) STR 417 (Del.)], penalty under Section 78 of Finance Act, 1994 is also not attracted in this case.
4. Heard both sides and perused the case records. So far as simultaneous imposition of penalties for the period prior to 10.05.2008 under Sections 76 & 78 of Finance Act, 1994 is concerned, the issue has since been settled by Delhi High Court in the case of Bajaj Travels Ltd. Vs. CST [2012 (25) STR 417 (Del.)]. The relevant paras 15 to 18 of this judgment are reproduced below:-
15.?By their very nature, Sections 76 and 78 of the Act operate in two different fields. In the case of Assistant Commissioner of Central Excise v. Krishna Poduval - (2005) 199 CTR 58 = 2006 (1) S.T.R. 185 (Ker.) the Kerala High Court has categorically held that instances of imposition of penalty under Section 76 and 78 of the Act are distinct and separate under two provisions and even if the offences are committed in the course of same transactions or arise out of the same Act, penalty would be imposable both under Section 76 and 78 of the Act. We are in agreement with the aforesaid rule.
16.?No doubt, Section 78 of the Act has been amended by the Finance Act, 2008 and the amendment provides that in case where penalty for suppressing the value of taxable service under Section 78 is imposed, the penalty for failure to pay service tax under Section 76 shall not apply. With this amendment the legal position now is that simultaneous penalties under both Section 76 and 78 of the Act would not be levied. However, since this amendment has come into force w.e.f. 16th May, 2008, it cannot have retrospective operation in the absence of any specific stipulation to this effect. Going by the nature of the amendment, it also cannot be said that this amendment is only clarificatory in nature. We may mention that Punjab and Haryana High Court in its decision dated 12th July, 2010 in STA 13/2010, entitled Commissioner of Central Excise v. M/s. Pannu Property Dealers, Ludhiana [2011 (24) S.T.R. 173 (P & H)] has taken the view that even if the scope of two sections of the Act may be different, the fact that penalty has been levied under Section 78 could be taken into account for levying or not levying penalty under Section 76 of the Act. However, that was a case where the appellate authority had exercised its discretion not to levy the penalty under Section 76 of the Act, when the larger penalty had already been imposed under Section 78 of the Act. In this scenario, the appeal of the Revenue against the said view taken by the appellate authority was dismissed holding that appellate authority was within its jurisdiction not to levy the penalty under Section 76 of the Act having regard to the fact that penalty equal to service tax had already been imposed under Section 78 of the Act. This thinking was also in consonance with the amendment now incorporated though the said amendment may not have been applicable at the relevant time. Moreover, the amount involved is ` 51,026/- only. The Court, thus, chose not to interfere with the aforesaid discretion of the Tribunal.
17.?However, in the instant case, the appellate authority, including the Tribunal, has chosen to impose the penalty under both the Sections. Since the penalty under both the Sections is imposable as rightly held by Kerala High Court in Krishna Poduval (supra), the appellant cannot contend that once penalty is imposed under Section 78, there should not have been any penalty under Section 76 of the Finance Act.
18.?We, thus, answer question no. 3 against the assessee and in favour of the Revenue holding that the aforesaid amendment to Section 78 by Finance Act, 2008 shall operate prospectively.
In view of the above, penalties can be simultaneously imposed under Section 76 and 78 of Finance Act, 1994 for the period prior to 16.05.2008 before its amendment when proviso to Section 78 was added.
5. Another argument taken by the appellant is that the show cause notice was issued in this case after 10.05.2008 when proviso to Section 78 of the Finance Act, 1994 was already existing after its amendment. Appellant has relied upon the five Member Larger Bench decision in the case of ATMA Steels Pvt.Ltd. & Ors Vs. CCE Chandigarh & Ors [1984 (17) ELT 331 (Tribunal-LB)] where the issue before the Tribunal was that Section 11A of Central Excise Act, 1944 came into force with effect from 17.11.1080 by virtue of Notification No.176180-CE, dt.12.11.1980. Simultaneously, Rule 10 of Central Excise Rules, 1944 for demanding duty was omitted under Notification No.177/80-CE, dt.12.11.1980. One of the points under Para (2)(b) of Para 2 of five member bench judgment was:-
(b) for short levy or non-levy which occurred prior to 17-11-1980, should a show cause notice issued after 17-11-1980 invoke rule 10 as it was prior to 17-11-1980 or Section 11A of the Act ? 5.1 The law laid down by the Larger Bench in Para 101 (d) was as followsg:-
(d) Recourse can be had to the provisions as prevailing at the time of initiation of proceedings, and the period available would be the one as permissible under the provisions existing at the time of issuance of show cause notice, in spite of the fact that the short-levy or non-levy refers, to the period when different period of limitation was available; and lastly. 5.2 Based on the above law laid down, it has been held by CESTAT in the case of Aneja Property Dealer Vs. CCE Ludhiana [2009 (13) STR 266 (Tri-Del)], Viking Tours & Travels Vs. CST Chennai [2011 (22) STR 69 (Tri-Che.)] and Jivant Enterprise Vs. CST Ahmedabad [2012 (28) STR 581 (Tri-Ahmd)] that the provisions existing on the date of show cause notice will be applicable. In the present appeal, the period involved is 01.04.2006 to 31.03.2011 and show cause notice was issued on 05.07.2011. Proviso to Section 78 of Finance Act, 1994 was introduced with effect from 10.05.2008 and was thus existing on the date of issue of show cause notice. This fact is different from the issue decided by Hon'ble High Court in the case of Bajaj Travels Ltd. Vs. CST (supra). In view of the above judgments relied upon by the appellant in Para 2.1 above, the appeal of the appellant is required to be allowed by holding that as the show cause notice was issued when proviso to Section 78 of Finance Act, 1994 was existing, therefore no penalty under Section 76 is imposable when Section 78 of Finance Act, 1994 penalty is imposed.
6. Appeal filed by the appellant is allowed.
(Pronounced in Court on ________________) (H.K. Thakur) Member (Technical) cbb ??
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