M/S Star Satellite Services vs Cce, Ludhiana

(Arising out of Order-in-Appeal No. 8/ST/APPL/JAL/2009 dated 6.2.2009 passed by the Commissioner (Appeals), Central Excise, Chandigarh)

For Approval & Signature :

Honble Mr. Justice G. Raghuram, President

Honble Mr. R.K. Singh, Member (Technical)

1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair copy of the order?

4. Whether order is to be circulated to the Department Authorities?

M/s Star Satellite Services Appellant

Vs.

CCE, Ludhiana Respondent

Appearance:

Shri Ravi Chopra, Advocate - for the Appellant

Shri M.R. Sharma, D.R. - for the Respondent

Coram : Honble Mr. Justice G. Raghuram, President

Honble Mr. R.K. Singh, Member (Technical)

F. Order No. 52318/2015

Per R.K. Singh :

Appeal has been filed against order-in-appeal dated 6.2.2009 which upheld demand of service tax of Rs.4,06,660/- (out of the demand of Rs.12,81,621/- confirmed by the primary authority) along with interest and mandatory equal penalty of Rs.4,06,660/- under Section 78 of Finance Act, 1994. Penalties of Rs.1000/- under Section 77, Rs.500/- under Section 75A and penalty under Section 76 imposed by the primary adjudicating authority were also upheld. The said demand was confirmed under cable operator service under Section 65(105)(zp).

2. The appellant is not contesting the demand on merit but has only pleaded that :

(i) The amount on which demand has been confirmed should be treated as cum-tax amount and accordingly the demand of Rs.4,06,660/- should be recomputed after giving benefit of cum-tax amount.

(ii) As penalty under Section 78 has been imposed the penalty under Section 76 should be set aside.

(iii) The option of reduced (25%) penalty under Section 78 was never extended and therefore the same should also be extended.

3. The ld. D.R. supported the impugned order.

4. We have considered the contentions of the appellant. In view of the provisions of Section 67, Explanation (2) cum-tax benefit is required extended to the appellant and as a consequence the amount of demand would be reduced to Rs. 3,69,019/- As regards setting aside penalty under Section 76 is concerned, as per the judgements of Punjab & Haryana High Court in the case of CCE Vs. Pannu Property Dealers STA No. 13 of 2010 (decided on 12.7.2010) and CCE Vs. First Flight Courier Ltd.  2011 (22) STR 622 (P&H) it has in effect been held that once penalty under Section 78 has been imposed penalty under Section 76 may not be justified and need not be imposed. Accordingly, the contention of the appellant with regard to setting aside the penalty under Section 76 is sustainable. It is also seen that in the case of Ratnamani Metals Vs. CCE - 2013-TIOL-1724-SC-Ah.-CX-P&H, Gujarat High Court held that if the option of reduced (25% of the demand) mandatory penalty has not been extended expressly at the lower levels, the CESTAT can award such an option.

4. In the light of the foregoing, we allow the appeal partially to the extent that the demand is reduced to Rs.3,69,019/-, penalty under Section 76 is set aside, penalty under Section 75A and 77 are upheld and penalty under Section 78 is reduced to Rs.3,69,019/-, The penalty under Section 78 will be 25% of the aforesaid amount of Rs.3,69,019/- if the demand confirmed along with interest and penalty is paid within 30 days of the receipt of this order.

(Justice G. Raghuram)

President

(R.K. Singh)

Member (Technical)

RM

1