- (1.) Heard learned counsel for the parties.
(2.) The petitioner is aggrieved against the order of Customs, Excise & Service Tax Appellate Tribunal, Eastern Bench, Kolkata (CESTAT) passed in Appeal ESM-58/03 dated 27.06.2003. The CESTAT upheld the order of the Commissioner of Central Excise (Appeals), Ranchi dated 27.02.2003 and held that the assessee is not liable to pay the penalty in view of the Explanation appended under Section 117 of the Finance Act, 2000 which provides that: Explanation: For removal of doubts, it is hereby declared that no act or omission on the part of any person shall be punishable as an offence which would not have so punishable if this Section had not come into force.
(3.) It will be worthwhile to mention here that the imposition of the service tax was challenged before the Hon'ble Supreme Court wherein the Hon'ble Supreme Court declared the provisions of Rule 2 (d) (xii) and (xvii) ofthe Service Tax Rules, 1994 as ultra virus and also directed the Revenue in the same judgment of M/s Laghu Udyog Bharati Vs. Union of India, 1999 112 ELT 365 to refund the tax collected. To nullify the judgment of the Hon'ble Supreme Court, Finance Act, 2000 was enacted, which revived the liability retrospectively. The validity of this enactment has also been upheld by the Hon'ble Supreme Court. As per Section 117 of the Finance Act, 2000, the person who has been refunded the tax amount, in view of the judgment in M/s Laghu Udyog Bharati was required to refund the amount back to revenue within 30 days from the date of assent from the President of India to the Finance Act, 2000. In this Act of 2000, there is provision of payment of interest at the rate of 24 % if the payment is not made within statutory period. In the case in hand the Revenue sought to levy penalty under Section 76 and 77 of the Finance Act, 1994 equal to the amount of service tax and in this case service tax is only Rs. 12,571/- and therefore, imposed penalty of Rs. 12571/- under Section 76 and 2000/- under Section 77 of the Finance Act, 1994, a total penalty amounting to Rs. 14,571/-. The Tribunal as well as the Commissioner (Appeals), Customs and Central Excise, Ranchi, both were of the view that in view of the Explanation appended to Section 117 of the Act, the penalty could not have been levied under Section 76 and 77 of the Act of 1994.;