ADVANCE GROUP Vs. COMMISSIONER OF SERVICE TAX, BANGALORE

JUDGEMENT

(1.) The stay application and appeal are taken up together for disposal as per law, as the issue is covered by the judgment rendered by this Bench in the case of M/s. Reach Events Management and 14 others vide Final Order Nos. 805 to 819/2008, dated 9 -7 -2008 [2009 (14) S.T.R. 251 (Tri. - Bang.)], which has followed the earlier batch matter of Majestic Mobikes Pvt. Ltd. v. CCE vide Final Order Nos. 652 to 672/2008 dated 30 -5 -2008 [2008 (11) S.T.R. 609 (Tri.)]. The Order -in -Original No. 53/2005 -S.T., dated 26 -8 -2005, passed by the Assistant Commissioner of Central Excise, considered the extricating circumstances for waiving the penalty in the matter. He has held that there was no mala fide intention on the part of the assessee in paying the tax. The Service Tax was paid before the issue of Show Cause Notice along with interest. Therefore, taking into consideration all the factors, he imposed a lesser penalty of Rs. 15,000/ - under Section 78 of the Finance Act. He refrained from imposing any penalty under Sections 76 and 77 of the Finance Act, 1994. The Commissioner reviewed the matter on recall and enhanced the penalty under Section 78 of the Finance Act and also imposed penalties under Sections 76 and 77 of the Act, which is under challenge.

(2.) THE learned Counsel submits that same situation arose in the batch matters where Final Orders have been given by this Bench and noting the similar grounds, the Tribunal has set aside the penalties imposed by the Commissioner. It is submitted that a similar situation also arose in the High Court of Karnataka matter in the case of CCE v. Sunitha Shetty - 2006 (3) S.T.R. 404 (Kar.) = 2004 (174) E.L.T. 313 (Kar.). wherein the High Court affirmed the order of the Tribunal setting aside the penalties.

(3.) THE learned DR submits that the High Courts ruling in the case of M/s. The First Flight Couriers Limited as reported in 2007 (8) S.T.R. 225 (Kar.) = 2007 -TIOL -500 -HC -KAR -ST would apply wherein the Honble High Court had set aside the Tribunals order and restored the Revisionary Order imposing penalty in similar circumstances. The learned Counsel distinguishes the judgment of First Flight Couriers and submits that in that case, there was no factual circumstances to set aside the penalty. Therefore, the High Court restored the penalty. Both these orders have been discussed at length in the ruling of Majestic Mobikes Pvt. Ltd. He submits that the judgment of the batch orders referred by him would apply to the facts of this case.