Hon'ble Judges/Coram:
Akil Abdul Hamid Kureshi and B.N. Karia

ORDER

Akil Abdul Hamid Kureshi, J.

1. The appeal is filed by the department challenging the judgment of CESTAT dated 13.6.2017 raising the following question for our consideration:

"Whether in the facts and circumstances of the case and law, the Hon'ble Tribunal has committed substantial error of law by quashing and setting aside the OIO dated 6/5/2011 holding that simultaneous penalty under section 76 and 78 of the Finance Act, 1994 cannot be imposed?"

2. The sole question thus is whether simultaneous penalties under sections 76 and 78 of the Finance Act, 1994 could have been imposed.

3. This issue is already covered by judgment of Division Bench of this Court in case of Raval Trading Company v. Commissioner of Service Tax (Tax Appeal No. 1534/2011, judgment dated 7.1.2016) in which following observations were made:

"9. It can thus be seen that at the relevant time Section 78 of the Finance Act, 1994, provided for penalty in cases of tax not being levied or paid, or short-levied or short-paid or erroneously refunded, by reason of fraud or collusion or willful mis-statement etc., whereas Section 76 covered the cases of non-payment of tax on any ground whatsoever. The penalty that authority could impose under Section 78 is hundred per cent of the amount of the service tax evaded. On the other hand, the penalty under Section 76 which could be imposed is at the fixed amount per day for the entire duration of the failure to deposit the tax which, in any case, would not exceed fifty percent of the service tax payable.

10. The tenor, background and the purpose for which the penalty could be imposed under Section 78 of the Finance Act, 1994, is entirely different than in case of Section 76 of the Finance Act, 1994. However, the language of Section 76 did not specifically exclude the situation; otherwise covered under Section 78 namely non-payment of tax on account of willful mis-statement, fraud or collusion etc. One plausible argument therefore could be that Section 76 would also cover such situations and permit the department to levy a further penalty for default as envisaged under Section 76 of the Act over and above the penalty imposed under Section 78 of the Finance Act, 1994. In order to clarify this position, a further proviso was introduced in Section 78 making it clear that, if the penalty is payable under Section 78, the provisions of Section 76 shall not apply. In other words, with the introduction of further proviso to Section