2022 (2) TMI 734

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....ices. On the basis of a audit findings of a client of appellant i.e. M/s. Tirat Ram Ahuja Pvt. Ltd., department observed that the appellant had failed to discharge his service tax liability. Accordingly, a Show Cause Notice dated 27.11.2009 for the period 2006-2007 demanding Rs. 1,22,174/- was issued. However, subsequently, vide a corrigendum dated 17.12.2009 abatement at the rate of 67 % in terms of Notification No. 1 of 2006 was allowed and the demands proposed was reduced to Rs. 40,318/-. This amount got paid by the appellant. Subsequently, another Show Cause Notice dated 23.04.2013 for the period 2007-08 to 2011-12 was issued vide which a demand of Rs. 1,46,36,284/- was proposed. Three more Show Cause Notices were subsequently issued fo....

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....rified and to resubmit the verified documents to be considered afresh by the adjudicating authority. 2. After the order of Commissioner (Appeals) dated 01.02.2018 appellant filed the refund claim on 08.01.2020 for the amount of pre-deposit i.e. for Rs. 14,40,000/-. The said refund claim has been decided vide Order-in-Original No. R-01/ 2020-2021 dated 29.06.2020 vide which the refund of Rs. 13,03,723/- was sanctioned after deducting the amount of penalty (Rs. 2,56,000 + 5000 + 40318) and that of interest (Rs. 18381/-) from Rs. 14,40,000/-. Being aggrieved of this order that the appeal was filed before Commissioner (Appeals) who vide Order No.08/2021 dated 03.02.2021 has rejected the appeal. Being aggrieved the appellant is before this Tr....

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....to be disproportionate to the demand. For the said reason the order under challenge is prayed to be set aside and appeal is prayed to be allowed. 6. While rebutting these submissions, ld. DR has relied upon the order. It has mentioned that the Section 77 of Finance Act, 1994 permits the imposition of penalty at the rate of Rs. 200/- per month. The Original Adjudicating Authority in Table II as mentioned in Order-in-Original dated 29 June, 2020 has calculated the penalty accordingly for a period of 1280 days for Rs. 2,56,000/-. Hence, there is no infirmity in the order under challenge. Appeal is prayed to be dismissed. 7. After hearing the rival contentions, the only grievance of the appellant appears to be about the penalty of Rs. 2,5....

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....to be prevented and once it exceeds the limits of a corrective deterrent, sufficient to dissuade the violator, it assumes the character of disproportionate penalty the Hon'ble Apex Court in the case of Hindustan Steel Limited (Supra) has also held that not providing for an opportunity of hearing to the assessee before levying maximum penalty, the act by itself is in violation of the principles of natural justice. 8. Keeping in view the said decisions, also keeping in view that per day penalty at the rate of Rs. 200/- can be levied in terms of sub-clause (3) of section 77 of Central Excise Act and the SCN is silent about specifically invoking the said sub-clause (3), I hold that the grievance of the present appeal stands already covered b....