2019 (2) TMI 1566 – CESTAT CHENNAI – TMI – Penalty u/s 76 and 78 of FA – the respondent has discharged the entire service tax liability along with interest before issuance of the SCN – Held that:- As per sub-section (3) of Section 73 when the assessee has paid up the service tax along with interest on its own ascertainment or being point out by the officers, no penalties are required to be imposed. In the present case, show cause notice was issued even though the appellant had paid up the entire service tax along with interest immediately on being point out by audit. The adjudicating authority has imposed penalty under section 76.
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The penalties under sections 76 and 78 are mutually exclusive. When the adjudicating authority has considered and imposed penalty under section 76, the same cannot be set aside by the Tribunal in an appeal filed by department requesting to impose penalty under Section 78. There is no ground stated in this appeal contending that penalty imposed under Se
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providing advertising services by displaying the advertisement of their clients on bus back panels, bus shelters etc., after obtaining permission from MTC, TNSTC and Southern Railway. They obtained service tax registration under the category of Advertising Agency Service. During the course of audit of the accounts of the respondents, for the period from October and November 2009, it was noticed that the respondents had short-paid service tax during the period from October 2008 to February 2009 and not paid service tax for the period July 2009 to October 2009. It was also noticed that respondent had declared lesser taxable value for the half-year ending return of 31.3.2009. Show cause notice was issued proposing to demand the short-paid service tax along with interest and for imposing penalties. After due process of law, the adjudicating authority confirmed the demand of ₹ 63,12,484/- raised in the show cause notice and appropriated the said amount already paid by the appellant a
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payment of duty. The adjudicating authority has failed to take note of these facts of suppression and imposed penalty only under section 76 of the Finance Act, 1994. He prayed that the impugned order may be interfered with by imposing penalty under section 78 of the Act ibid. 3. None appeared for the respondent though notices were issued for hearing. 4. The matter is taken up for disposal after hearing the ld. AR and on perusal of records. 5. The grievance of the department is that the adjudicating authority failed to impose penalty under section 78 of the Finance Act. It is seen that the respondent has discharged the entire service tax liability along with interest before issuance of the show cause notice. Part of the amount was paid up by adjusting CENVAT credit. In para 8 of the impugned order the respondent has taken a plea that they defaulted in payment of service tax due to certain legal dispute between their clients. As per sub-section (3) of Section 73 when the assessee has pa
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t requesting to impose penalty under Secction78. There is no ground stated in this appeal contending that penalty imposed under Section 76 is erroneous. The Hon ble High Court of Gujarat in Commissioner of CGST & Central Excise Vs. Sai Consulting Engineering Ltd. – 2018 (15) GSTL 708 (Guj.) has held that simultaneous penalties under Section 76 as well as 78 of the Finance Act cannot be imposed. Similar view is taken in Care and Cure (P) Ltd. Vs. Commissioner of Central Excise, Chandigarh – 2015 (38) STR 225 (P&H). 6. In view of the discussions hereinabove and also applying the ratio of the decisions cited in the present appeal, we hold that simultaneous penalty under section 76 and 78 cannot be imposed under law. given situation, when there is a penalty under section 76, we find that simultaneous penalty under section 78 cannot be imposed under law. In any case, the respondent has paid up the entire demand along with interest before issuance of show cause notice, hence further
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