2018 (5) TMI 1425 – GUJARAT HIGH COURT – 2018 (15) G. S. T. L. 708 (Guj.) – Simultaneous penalty u/s 76 and 78 – Whether simultaneous penalties under sections 76 and 78 of the Finance Act, 1994 could have been imposed? – Held that: – issue is already covered by judgment of Division Bench of this Court in case of Raval Trading Company v. Commissioner of Service Tax [2016 (2) TMI 172 – GUJARAT HIGH COURT], where it was held that Section 76 of the Finance Act, 1994, would cover only the cases of nonpayment of service tax which are not related to fraud, collusion, willful misstatement, suppression of facts or contravention of any of the provisions of the said Chapter or the rules made thereunder with the intent to evade payment of service tax since legislature had already provided for penalty in Section 78 in such situations. Thus further proviso to Section 78 made it explicit which was till then implicit – simultaneous penalty under section 76 and 78 of the Finance Act, 1994 cannot be im
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wing observations were made : 9. It can thus be seen that at the relevant time Section 78 of the Finance Act, 1994, provided for penalty in cases of tax not being levied or paid, or shortlevied or shortpaid or erroneously refunded, by reason of fraud or collusion or willful misstatement etc., whereas Section 76 covered the cases of nonpayment of tax on any ground whatsoever. The penalty that authority could impose under Section 78 is hundred per cent of the amount of the service tax evaded. On the other hand, the penalty under Section 76 which could be imposed is at the fixed amount per day for the entire duration of the failure to deposit the tax which, in any case, would not exceed fifty percent of the service tax payable. 10. The tenor, background and the purpose for which the penalty could be imposed under Section 78 of the Finance Act, 1994, is entirely different than in case of Section 76 of the Finance Act, 1994. However, the language of Section 76 did not specifically exclude t
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ry amendment and not creating a liability for the first time. Even without the aid to this further proviso to Section 78, one entire plausible view was that the situation envisaged under Section 76 of the Finance Act, 1994, would exclude those cases covered under Section 78 of the Finance Act, 1994. In other words, Section 76 of the Finance Act, 1994, would cover only the cases of nonpayment of service tax which are not related to fraud, collusion, willful misstatement, suppression of facts or contravention of any of the provisions of the said Chapter or the rules made thereunder with the intent to evade payment of service tax since legislature had already provided for penalty in Section 78 in such situations. Thus further proviso to Section 78 made it explicit which was till then implicit. The Court noticed that similar view was expressed by Punjab and Haryana High Court in case of Commissioner of Central Excise Vs. First Flight Courier Limited reported in 2011(22) S.T.R. 622 (P&H
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