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2016 (7) TMI 1126 - AT - Service TaxLevy of penalty u/s 76 of the Finance Act, 1994 - Service Tax on Renting of Immoveable Property Service was paid through Cenvat Credit account available on that day along with interest vide GAR 7 Challan - the adjudicating authority as well as the appellate authority held that the payment of service tax made from cenvat credit is not proper for the reason that the service tax dues are pertaining to the period 2007-08 to 2009-10 whereas the appellant have paid service tax from cenvat credit which was available on 31.1.2011. It was contended that as per Rule 3(4) of Cenvat Credit Rules, 2004. The Cenvat Credit available on the last day of the period for which service tax is due can only be utilized. Held that:- From the circular dated 28-3-2012, it is very clear that if payment of arrears is made under Section 11A of the Act, then Rule 3(4) of Cenvat Credit Rules, 2014 shall not apply. In the present case the appellant has paid the amount under Section 73 (1)/73 (3) which being pari materia to Section 11A, the Board Circular clearly applies and accordingly there is no restriction to utilize the Cenvat Credit even at later date at the time of payment of service tax. In the present case the service tax along with interest was paid in the months of February 2011 i.e. before 28.5.2012. Accordingly, the condition specified for non-imposition of penalty under Section 76, 77 & 78 has been complied with by the appellant. Therefore no penalty is imposable in the present case. - Demand and penalty set aside - Decided in favor of assessee.
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