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2015 (11) TMI 904

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.... Officers of the DGCEI visited the premises and on thorough investigation came to conclusion that the appellant had not properly discharged the Service Tax liability and was involved in evasion of Service Tax. After recording various statements, the show-cause notice was issued to the appellant that demand of differential amount of Service Tax for the period April, 2002 to March, 04 with interest and also for imposition of penalties. The appellant contested the show-cause notice and stated that they discharged the entire Service Tax liability before the issue of show-cause notice and also paid the interest. They claimed that they have not evaded the Service Tax and paid interest on them. They were under severe financial difficulty and heavy....

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....inancial trouble. It is his submission that the Reviewing authority could not have reviewed situation, wherein the adjudicating authority has exercised the discretionary power of waiver of the penalty. He would draw our attention to the judgment of this Tribunal in the case of KNR Contractors Vs. CCE 2011 (21) STR 436 (Tri-ND), wherein it was held that if the authority has exercised discretion of waiver of the penalty, coming to a conclusion that there was reasonable cause, same could not be called in question. He would also submit that the judgment of the Hon'ble High Court of Karnataka in the case of Commissioner of Service Tax Vs. Handimann Services Ltd.  2011 (24)STR 641 (Kar) is also on the very same point and also the proposi....

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....s sections. The only reasoning given by the Reviewing authority is that but for the intervention of the Investigating Agency the short payment could have gone undetected. 5.3 We are not in agreement with the findings recorded by the Reviewing authority for imposing penalties on the appellant. First and foremost, we find that the adjudicating authority has exercised his discretionary power under Section 80 for dropping the proceedings to impose the penalty with a reasoned order. The reasoning given by the adjudicating authority are acceptable justification for non-imposition of penalties. We find strong force in the contentions raised by the learned Counsel that the Hon'ble High Court of Karnataka in the case of Handimann (supra) has s....

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.... and impose penalty in pursuance of his revisional jurisdiction. The Tribunal was justified in interfering with the said order and setting aside the same. 5.4 We also find that the Hon'ble High Court of Punjab & Haryana in the case of Darmania Telecom (supra) on the same issue has held as under: - 2. The order-in-original was passed by the Assistant Commissioner on 15-6-2005 (A-1) and penalty of Rs. 1,000/- under Sections 76 and 78 of the Act was imposed by exercising power vested in him under Section 80 of the Act. The aforesaid discretion exercised by the Assistant Commissioner was interfered with by the Commissioner while exercising revisional power under Section 84 of the Act by raising it to Rs. 31,652/-. The Commissioner also r....