CELTONE Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE assessees paid service tax together with interest on being pointed out by the excise authorities, prior to the issue of show -cause notice. Their contention before the Bench, therefore, is that no notice for imposition of penalty would have been issued under the provisions of Section 73(3) of the Finance Act, 1994 and hence, seek setting aside of the penalties imposed under the provisions of Sections 76 and 78 ibid.

(2.) I have heard both sides and find that the issue stands settled by the decision of the Tribunal in Santhi Casting Works v. CCE : [2009] 20 STT 459 (Chennai -CESTAT) holding that penalty cannot be imposed when service tax and interest is paid prior to issue of show -cause notice. Following the ratio of the above decision I set aside the penalties imposed under the provisions of Sections 76 and 78 of the Finance Act, 1994 and allow the appeal.