STANDARD DRY CLEANERS Vs. CCE & ST

JUDGEMENT

(1.) THE appellants are in appeal against imposition of penalty under Sections 77 and 78 of the Finance Act, 1994. The facts in brief are that the appellants are provider of dry cleaning service. A search was conducted on them in January, 2006 which revealed that they did not file any ST -3 return upto September 2005 and did not pay any service tax during the period April 2004 to December, 2005 and accordingly a show cause notice dated 29.12.2006 was issued asking them as to why service tax of Rs. 3,15,143/ -should not be recovered alongwith interest and penalty invoking the extended period. The adjudicating authority confirmed the demand alongwith interest and imposed penalties under Sections 77 and 78 but did not impose penalty under Section 76 of the Act ibid. The impugned Order -in -Appeal No. 17(AKJ)ST/JPR -I/2012 dated 16.06.2012 upheld the said order.

(2.) THE appellants contend that they have been registered with the Central Excise Department since 2002 and they could not file the ST -3 returns and could not deposit service tax because their computer was down. They had also contended that the original adjudicating authority waived the penalty under Section 76 by referring to Section 80 of the Finance Act, 1994. Once penalty under Section 76 on account of Section 80 of the Act ibid was not imposed, question of imposing penalty under Sections 77 and 78 ibid should not have arisen. Learned DR defended the impugned order stating that the appellants have never claimed that they were not aware of their tax liability, the period involved is from April 2004 to December, 2005 and having regard to the length of the period involved the argument that they could not file the return or pay service tax because their computer was down is untenable. He also stated that it is evident from the order -in -original as well as from the order -in appeal that penalty under Section 76 has not been imposed only because it will amount to double penalty in the wake of penalty under Section 78 having been imposed.