Appeal granted, penalties under Finance Act set aside. Stay Petition resolved.

The Tribunal allowed the appeal, setting aside the penalties imposed under Section 76 of the Finance Act, 1994. The Stay Petition and appeal were both disposed of accordingly.

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Issues:
1. Imposition of penalty under Section 76 of the Finance Act, 1994.

Analysis:
The appellant, engaged in Commercial & Industrial Construction services, deposited Rs.10 lakhs upon discovering non-payment of Service Tax. Subsequently, a Show Cause Notice was issued for non-payment of interest and a short payment of Rs.23,000, leading to the confirmation of demand for Service Tax, interest, and penalties under Sections 76 and 78 of the Finance Act, 1994. The appellant did not contest the demand under Section 78, having paid 25% of the penalty before the notice. The main contention was against the penalty under Section 76. The matter proceeded to final hearing after waiving the pre-deposit requirement, given the singular issue at hand.

The appellant's Chartered Accountant relied on various decisions to argue against the imposition of penalty under Section 76. Citing cases like M/s Landmark Automobiles vs. CST Ahmedabad and CCE Chandigarh-I vs. Cool Tech Corpon., it was contended that penalties under Sections 76 and 78 are mutually exclusive, even predating the amendment allowing for non-imposition of penalty under Section 78.

Considering the precedents referenced, the Tribunal allowed the appeal, setting aside the penalties imposed under Section 76 of the Finance Act, 1994. The Stay Petition and appeal were both disposed of accordingly.

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