Penalty enhancement under the Finance Act was unsustainable after the Tribunal had already held that no penalty was exigible under the amnesty scheme.

Penalty enhancement in revision under the Finance Act, 1994 could not survive once the Tribunal had already held that penalty was not exigible in view of the amnesty scheme. The adjudicating authority and the Commissioner (Appeals) had sustained the demand and penalty, but the earlier Tribunal order had set aside the penalty on merits. In those circumstances, the revisional authority lacked a sustainable basis to enhance the same penalty. The revisionary enhancement was therefore set aside in favour of the assessee.

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Issues: Whether the enhancement of penalty in revision under Section 76 of the Finance Act, 1994 was sustainable when the Tribunal had already set aside the penalty in view of the amnesty scheme.

Analysis: The adjudicating authority had confirmed the demand and imposed penalty, and the Commissioner (Appeals) had upheld the order. However, in an earlier final order, the Tribunal had already held that the case did not warrant imposition of penalty in view of the amnesty scheme introduced by the Revenue. Once the Tribunal had concluded that penalty was not imposable, the subsequent revisionary enhancement of the same penalty could not survive.

Conclusion: The enhancement of penalty in revision was not sustainable and was set aside in favour of the assessee.

Final Conclusion: The appeal succeeded because the revision order enhancing penalty was invalidated after the Tribunal had already held that no penalty was exigible.

Ratio Decidendi: Where penalty has been held unsustainable on merits, a revision order enhancing that very penalty cannot be sustained.

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