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Judgment
K.L. Manjunath, J.—The Revenue has come up in this appeal challenging the concurrent findings of the orders passed by the Commissioner of Appeals on 21.1.2006 which has been confirmed by the CESTAT, Bangalore in Final Order dated 2084/2006 on 19.12.2007 regarding the following substantial question of law:
Whether the levy of penalty imposed in the order in original was u/s 76 as it stood during the period from August 2001 to October 2002 i.e., the period during which service tax liability arose.
We have heard the learned Counsel for the parties.
The only question to be considered by this Court in this appeal is whether the appellant can levy penalty at the rate of Rs. 100/- per day on failure to pay duty by the assessee for the period prior to 10.9.2004 or not.
It is the contention of the assessee that the penalty provision in terms of Section 76 of the Finance Act proposing to levy penalty at the rate of Rs. 100/- per day has come into effect only from 10.9.2004 and that the respondent herein had failed to pay service tax for the period august 2001 to October 2002 and considering the said period, the Revenue cannot levy penalty at the rate of Rs. 100/- per day by relying upon the provisions of Section 76 as it is only prospective in nature and not retrospective. The Tribunal as well as the Commissioner have found that the amended provision has no application for the period August 2001 to October 2002 as Section 76 empowering the Revenue to levy penalty at the rate of Rs. 100/- per day has come into force only with effect from 10.9.2004.
Mr Shashikanth. counsel for the appellant relying upon the judgment in the case of 2005 (98) ECC 771 contends that even for the period prior to 10.9.2004, the Tribunal has confirmed the order of levying penalty at the rate of Rs. 100/- per day. Therefore, he requests the court to allow the appeal.
Per contra, Mr Kamath contends, in the said judgment there was no occasion for the Tribunal to consider the effective date of 10.9.2004 and the Tribunal did not consider the said question as the same had not been brought to the notice of the Tribunal. In the circumstances, he requests the court to dismiss the appeal holding that the judgment relied upon by the counsel for the assessee is not applicable.
Having heard the counsel for the parties, we are of the opinion that in ETA Engineering Ltd. case, CESTAT, Northern Bench, New Delhi did not consider the effective date of the amended provision. The said question had also not been raised by the parties therein. Without considering the same, if relief had been given to the Revenue, the same cannot be a ground for us to follow the said judgment. In our view, the Revenue is empowered to levy penalty at the rate of Rs. 100/- per day if the assessee fails to pay duty only in respect of the period from 10.9 2004 onwards and not prior to the said date.
As the duty payable in this ease is prior to 10.9.2004, we dismiss the appeal answering the question against the Revenue.