Even though the scope of penalties levied u/s.73 and u/s.78 are different, penalties should not be levied under both the sections.

The respondent was a property dealer and a service provider of taxable service. An SCN was issued for failure to file returns and pay service tax on taxable services. The adjudicating authority imposed penalty u/s.76 for non-payment of service tax, u/s.77 for not filing the return and u/s.78 for suppressing the taxable value. However on appeal, penalty u/s.76 and u/s.77 was deleted, but the penalty u/s.78 was upheld. The Revenue argued that the concept of penalty u/s.78 is different from those u/s.76 and u/s.77 by referring to the case of Assistant Commissioner of Central Excise v. Krishna Poduval, 2006 (1) STR 185 which stated that even without suppression there could be failure to pay service tax. The respondent argued that there had been an amendment to section 78 by the Finance Act, 2008 stating that if penalty was payable u/s. 78, provision of section 76 would not apply.

Held:

The Tribunal held that even though the reasoning given by the Appellate Authority that if penalty was imposed u/s.78, penalty could not be levied u/s.76 of the Act was incorrect, the Appellate Authority was within its jurisdiction to drop penalty u/s.76 as the penalty was imposed u/s.78. The amount was relatively small and this contention was in consonance with the amendment by the Finance Act, 2008 prescribing non-levy of penalties under both the penal sections simultaneously.