2017 (4) TMI 804 - AT - Service Tax

Tribunal: Penalties under Finance Act sustainable until 10.05.2008, waiver granted.

M/s. Woolmark Service India Pvt. Ltd. Versus C.S.T. Delhi

M/s. Woolmark Service India Pvt. Ltd. Versus C.S.T. Delhi - TMI Issues:1. Imposition of simultaneous penalties under Section 76 and 78 of the Finance Act, 1994.2. Applicability of the amendment in Section 78 retrospectively or prospectively.Issue 1: Imposition of Simultaneous Penalties under Section 76 and 78:The appellant contested the penalty imposed under Section 76 and 78 of the Finance Act, 1994. The appellant argued that simultaneous penalties under both sections cannot be imposed. The appellant relied on various tribunal decisions to support this contention, such as CCE Chandigarh vs Patiala Marketing Services Pvt. Ltd., Skylark Fiscal Services (P) Ltd. vs CST Kolkata, Chansama Taluka Sarvoday Mazoor Kamdar Sahakari Mandli Ltd., Raval Trading Co. vs CST, and Commr. of Customs (I&G) vs Loveleen Sawhney. On the other hand, the respondent argued that penalties under both sections could be imposed before the amendment of Section 78 up to 10.05.2008. The respondent cited the judgment of Hon’ble Delhi High Court in Bajaj Travels Ltd. vs CST and a decision of the Tribunal in Board of Control for Cricket in India vs CST Mum-I to support this stance.Issue 2: Applicability of Amendment in Section 78:The period in question for this case was from 01.07.2003 to 31.03.2009. Section 78 of the Finance Act, 1994 was amended on 10.05.2008, stating that if a penalty is payable under Section 78, Section 76 penalties shall not apply. The central question before the Tribunal was whether this amendment should apply retrospectively or prospectively. The Tribunal referred to the judgment of Hon’ble Delhi High Court in Bajaj Travels Ltd., which held that the amendment could not have retrospective application without a specific stipulation to that effect. The Tribunal also noted that penalties under both Section 76 and 78 were imposable before 10.05.2008, as per previous judgments. Consequently, penalties under both sections were deemed sustainable until 10.05.2008, with 25% of the penalty under Section 78 already deposited by the appellant. The remaining 75% of the penalty under Section 78 was waived for the appellant.In conclusion, the Tribunal ruled that penalties under both Section 76 and 78 were sustainable until 10.05.2008, but after that date, penalties under Section 76 were not sustainable. The appellant's appeal was disposed of accordingly, following the precedent set by the judgment of Hon’ble Delhi High Court in Bajaj Travels Ltd.