Duplicative service tax penalties cannot be sustained where Section 78 penalty already applies for the same default.

Penalty under Section 76 of the Finance Act, 1994 does not survive where penalty under Section 78 has already been imposed for the same default. CESTAT, following the Punjab and Haryana High Court view, treated simultaneous penalties for the same contravention as unsustainable and upheld deletion of the Section 76 penalty while maintaining the Section 78 penalty. The operative principle is that duplicative punishment for one default is not permissible when the more specific penalty provision has been applied.

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Issues: Whether penalty under Section 76 of the Finance Act, 1994 can be sustained when penalty under Section 78 of the Finance Act, 1994 has already been imposed for the same default.

Analysis: The Department's appeal challenged the setting aside of the penalty under Section 76 while the penalty under Section 78 was maintained. The Tribunal noted the view of the Punjab and Haryana High Court that two penalties cannot be imposed for the same default and that penalty under Section 76 need not survive where penalty under Section 78 has been imposed.

Conclusion: The challenge to deletion of the penalty under Section 76 was rejected, and the order deleting that penalty was upheld.

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