Simultaneous penalties under sections 76 and 78 were barred for the earlier service tax period; section 76 penalty set aside.

Penalty under section 76 of the Finance Act, 1994 was unsustainable because penalty under section 78 had already been imposed for the same service tax default during an earlier period. The Tribunal applied the principle that the two penalties could not be levied simultaneously for the same offence for the relevant period, and noted that the amendment permitting simultaneous levy operated only from 10.05.2008. The assessee had paid the service tax with interest and discharged 25% of the section 78 penalty, so the section 76 penalty was set aside while the tax demand, interest, and reduced section 78 penalty were left undisturbed.

---

---

Issues: Whether the penalty imposed under section 76 of the Finance Act, 1994 was sustainable when penalty under section 78 had also been imposed for the same period of service tax demand.

Analysis: The demand related to a period after outdoor catering service became taxable. The appellant had paid the service tax along with interest and had also discharged 25% of the penalty under section 78. The Tribunal noted that penalties under sections 76 and 78 could not be imposed simultaneously for the same default, and that the later amendment enabling such simultaneous levy was effective only from 10.05.2008, whereas the dispute pertained to an earlier period.

Conclusion: The penalty under section 76 was set aside. The service tax demand, interest, and the reduced penalty under section 78 were left undisturbed.

---