Penalty

CESTAT, BANGALORE BENCH

R. S. Balaji

v.

Commissioner of Service Tax, Bangalore

T.K. JAYARAMAN, TECHNICAL MEMBER

APPEAL NO. ST/ST/130 OF 2007 IN ST/162 OF 2007

STAY ORDER NO. 565 OF 2007

July 05, 2007

Section 80 read with sections 76 and 78 of Finance Act, 1994 - Penalty - Not to be imposed in certain cases - Adjudicating authority dropped penal Proceedings initiated against assessee architect in view of fact that he had discharged service tax liability before issuance of show cause notice - Review authority reviewed order of adjudicating authority and imposed above mentioned penalties - Assessee relaying on decisions of Tribunal contended that once adjudicating authority uses his discretion and takes a conscious decision to drop penal proceeding it was not open for reviewing authority to impose further penalties or enhance penalties already imposed - Whether in such circumstances there was enough justification for grant of full waiver of Penalties imposed and, therefore, stay was to be granted for recovery there of - Held, yes (Para 4)

FACTS

The assessee was rendering services of architect. During the amnesty scheme, he got registered for payment of service tax. However revenue authorities initiated penalty proceedings under sections 76 and 78 on him. The adjudicating authority dropped the penal proceedings in view of fact that the assessee had discharged the service tax liability even before issue of showcause notice. The review authority reviewed the order of the adjudicating authority and imposed the above mentioned penalties.

On application:

HELD

In the case of Mass Marketing & Advertising Services (P.) Ltd. v. CCE [2006] 4 STT 89 Bang-CESTAT) and CCE v. Hazi Abdul Razzaque [2006] 5 STT 307 (Kol.-CESTAT). It had been held that once the adjudicating authority uses his discretion and takes a conscious decision to drop the penal proceedings it was not open for the review authority to impose further penalties or enhance the penalties imposed. (Para 2)

On a very careful consideration of the entire issue, it was found that there was enough justification for grant of full waiver of the penalties imposed. Hence, waiver of deposit of the penalties imposed was ordered and further recovery proceedings was to be stayed. [Para 4]