Appeal allowed due to compliance with Amnesty Scheme guidelines. Penalties set aside.

The appeal was filed against an Order-in-Revision enhancing penalties under Section 84 of the Finance Act, 1994. The Member (Judicial) found the issue to be identical to a previous case involving Rakesh Rao, where penalties were not enhanced due to compliance with an Amnesty Scheme. Consequently, the impugned order enhancing penalties was set aside, and the appellants were directed to deposit the penalties imposed under Sections 76 & 77 within two weeks from the date of the judgment.

---

---

Issues:
Enhancement of penalties under Sections 76 & 77 of the Finance Act, 1994.

Analysis:
The appeal was filed against an Order-in-Revision enhancing penalties under Section 84 of the Finance Act, 1994. The appellant had paid the service tax and interest on 23.3.2004, but penalties under Sections 76 & 77 were not discharged. The Commissioner of Central Excise & Customs, Nashik, reviewed the order and increased the penalties. The issue revolved around the enhancement of penalties, with reference made to a similar case involving Rakesh Rao. The Tribunal in the Rakesh Rao case held that penalties cannot be enhanced if the service tax and interest are paid before a certain date under an Amnesty Scheme introduced by the Central Government. The Tribunal also cited a case involving Bharat Security Service & Worker's Cont., stating that the Amnesty Scheme applies even to those who failed to comply with the law despite registration.

The Member (Judicial) found the issue in this case to be identical to the Rakesh Rao case. Consequently, the impugned order enhancing penalties was set aside, and the appellants were directed to deposit the penalties imposed under Sections 76 & 77 within two weeks from the date of the judgment.

---