FIBREX INDUSTRIES Vs CCE (2014-TIOL-903-CESTAT-MUM)
Facts:
The appellant was providing the services of glass wool coating to the sugar factories. At the time of audit in a sugar factory, it came to the knowledge of the department that the sugar factory has received these services from the appellant on which the appellant has not paid the service tax with the department. The appellant has also obtained registration with the department. Immediately, on pointing out by the department, the appellant paid the service tax along with interest and also paid the remaining amount during the course of proceedings. Later-on, a show-cause notice was issued for demanding the service tax along with interest and penalties under sections 76, 77 and 78 of the Finance Act, 1994. Both the lower authorities confirmed the demand of service tax along with interest and imposition of penalties under section 76, 77 and 78 of the Act ibid.
Held:
As held by the Hon'ble Karnataka High Court in the case of Motor World penalties under section 76 and 78 cannot be imposed simultaneously. Therefore, penalty imposed under section 76 is dropped. Further no option was given to the appellant to pay 25% of duty as penalty. As they have paid the service tax along with interest before the issuance of show-cause notice, as per the provisions of section 11AC of the Act, the penalty is reduced to 25% of duty which is to be paid within 30 days from today failing which they would be liable to pay 100% of the duty amount as penalty.
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