COMMISSIONER OF CENTRAL EXCISE, LUDHIANA Vs. CITY CABLE

JUDGEMENT

(1.) REVENUE has come in appeal being aggrieved by the first Appellate order waiving various penalties imposed under Sections 75(A), 76, 77 and 78 of the Finance Act, 1994. Learned DR explains that there is no good ground in the appellate order to grant relief to the appellants who has paid the tax and interest before adjudication. The appellant failed to seek registration. Revenue had also made investigation to find out whether liability of the respondent arose. So also, there was default to pay tax for which consequence of law was applied. For suppression of fact, the respondent was to face proceeding under Section 73 of the Finance Act, 1994. That invited penal action under Sections 78 and 76. Therefore, the adjudication order is warranted to be restored reversing the appellate order which granted immunity to the respondents.

(2.) LEARNED Counsel on the other hand, submits that the respondents cooperated with the investigation and paid the taxes along with interest before adjudication was completed. There is no mala fide on the part of the respondent nor was there suppression of any facts for which reason the respondent got relief at the First Appellate stage.

(3.) WE notice the fact that the respondent has not come in appeal against the service tax demanded under Section 73 of the Finance Act, 1994. Short payment of tax is enough to impose penalty under Section 78 of the Finance Act, 1994 even though the respondent was cooperative to the investigation. Penalty proceeding being independent of adjudication, levy of penalty to the tune of 25% of the service tax demand, following the judgment of the Hon'ble High Court in K.P. Pouches v. Union of India reported in : 2008 (228) E.L.T. 31 and CCE Rohtak v. J.R. Fabrics reported in, 2009 (238) E.L.T. 209 (P & H) of Hon'ble Punjab & Haryana High Court, would be justified. These judgments have been noticed in the recent judgment of Hon'ble High Court of Punjab & Haryana in the case of Appeal No. 177 of 2010 CCE, Chandigarh v. Bajaj Travels decided on 21st December, 2010 [2011 (21) S.T.R. 497 (P & H)]. We also notice that no opportunity for exercise of option to pay the demand within stipulated period was given to the respondent following the ratio laid down in the above judgments. For benefit of reading, para 27 of the judgment in K.P. Pouches is reproduced below; -