DEVENDRA TRAVELS Vs. CCE

JUDGEMENT

(1.) THIS is an appeal filed by M/s. Devendra Travels, Behind Panchayat Guest House, Station Road, Bharuch against OIR No. 18/VDR -II/SERVICE -TAX/DEVENDRA TRA -VELS/COMMR/2011, dated January 31, 2011, passed by the Commissioner of Customs and Central Excise, Vadodara -II. Under this order, order dated February 6, 2009 passed by the original adjudicating authority has been set aside and penalties under sections 76, 77 and 78 of the Finance Act, 1994 have been imposed. The appellant filed appeal on the ground that 25 percent penalty imposed under section 78 of the Finance Act, 1994 has already been deposited by them and therefore penalties under sections 76 and 77 of the Finance Act, 1994 are not attracted. They relied upon the following judgments:

(2.) IN view of the above, the appellant emphasised that penalties under sections 76, 77 and 78 are not imposable.

(3.) THERE is no dispute so far as payment of service tax and interest is concerned as the appellant has only agitated imposition of penalties under sections 76, 77 and 78. It is also observed from the order -in -original dated February 6, 2009 passed by the adjudicating authority that a penalty of Rs. 32,515 (referring 25 percent of the total penalty) has been imposed under section 78 of the Finance Act, 1994 which the Commissioner raised to Rs. 1,30,059 under his order -in -revision dated January 31, 2011. In fact the adjudicating authority should have imposed a penalty of Rs. 1,30,059 under section 78 of the Finance Act, 1994 and should have given an option to the appellants to make payment within 30 days in order to avail of the 25 percent penalty benefit. None of the lower authorities have given any such option which is required to be given as per the judgment of the honourable High Court of Gujarat in the case of Commissioner of Central Excise and Customs, Surat -I v. Harish Silk Mills, [2010] 255 ELT 393 (Guj). Since 25 percent of penalty under section 78 has already been paid by the appellant and no such option was extended to the appellants in the orders passed by the lower authorities, the bench hold that imposition of 25 percent of penalty paid under section 78 of the Finance Act, 1994 is appropriate and no further penalty under section 78 of the Finance Act, 1994 is recoverable.