J.C. ELECTRICALS Vs. CCE

JUDGEMENT

(1.) THE appellant is engaged in providing management service to MESCOM and their substations in Kadaba and Thokkottu. There was delay in payment of service tax from time to time. Consequently proceedings were initiated which culminated in confirmation of demand with interest which was already paid and the original adjudicating authority initially dropped the entire proceedings and appropriated the amounts already paid towards the dues. However, the original authority exercised his power under Section 74 of the Finance Act, 1994 and issued a rectification order in which he imposed penalty under Section 78 and waived penalties under Sections 76 and 77 of the Finance Act, 1994 by invoking the provisions of Section 80 of the Finance Act, 1994. On an appeal filed by the assessee against this order, the penalty under Section 78 imposed by the adjudicating authority was also set aside. After the Commissioner (A) passed the order setting aside the penalty, the Commissioner (A) exercised his power under Section 84 of the Finance Act, 1994 and revised the order of the original adjudicating authority and imposed penalties under Section 76, 77 and 78 of Finance Act, 1994. Heard both the sides.

(2.) I find myself in agreement with the submissions made by the learned counsel that once the Commissioner (A) had set aside the order of the original adjudicating authority imposing penalty, the order of the original authority had merged with the order of Commissioner (A) and therefore, as far as penalty under Section 78 of Finance Act, 1994 was concerned, the matter had attained finality in the absence of an appeal by the Revenue against the order of the Commissioner (A). As regards penalties under Sections 76 and 77 of Finance Act, 1994 imposed by the Commissioner, I find that as submitted by the learned counsel the issue is covered in favour of the assessee by the decision of the Hon'ble High Court of Karnataka in the case of Adecco Flexione Workforce Solutions Ltd.: : 2012 (26) S.T.R. 3 (Kar.) wherein it was held that the Commissioner cannot revise the order in which the original authority has used his discretionary powers as regards imposition of penalty. Since the issue is squarely covered by the decision of the Hon'ble High Court, the impugned revision order has to be set aside on this ground alone.