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June 2011

(2011) 22 STR 20 (Tri.-Chennai) — Anil Kumar Yadav v. CCEx., Pondicherry.

By Puloma Dalal
Jayesh Gogri
Chartered Accountants
Reading Time 2 mins
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Section 80 of the Finance Act cannot be invoked to waive penalty under some sections and to impose penalty under some other sections.

Facts:
The original authority had imposed penalty u/s. 78 of the Finance Act, but had not imposed any penalty u/s. 76 and 77 of the Finance Act invoking section 80 of the Finance Act. On appeal against the order of the original authority for waiver of penalty u/s. 78, penalty amount was reduced to 25%. However, the appellant appealed that full penalty shall be waived as he had paid the entire Service tax amount along with interest, proving bona fide interest. The respondents appealed that since the penalty amount of 25% was not paid within one month, full penalty shall be imposable.

Held:
Section 80 is applicable in respect of penalties imposable u/s.s 76, 77 and 78 of the Finance Act. Once it is accepted that there was a reasonable cause for such failure to pay Service tax, penalties u/s.s 76, 77 and 78 all are to be waived. More so since the Department had not appealed against waiver of penalty u/s.s 76 and 77 r.w.s 80 of the Finance Act. Section 80 does not authorise authorities to waive the penalty under some sections and impose penalty under some other sections. Therefore, penalty imposed u/s. 78 could not be sustained.

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