2017 (11) TMI 887 - CESTAT BANGALORE - Service Tax

Head Note / Extract:
CENVAT credit - services provided to Special Economic Zone - C & F Agent services - denial on the ground that it has been entirely used for trading activity? - Held that: - Hon ble High Court of Madras in the case of M/s. Ruchika Global Interlinks vs. CESTAT & CCE [2017 (6) TMI 635 - MADRAS HIGH COURT] has clearly held that for trading activity, appellant is not entitled to the CENVAT credit of service tax - the CENVAT credit of service tax paid on trading activity carried out by the appellant rightly denied. Demand of interest and penalty - Held that: - the appellant has not paid or short-paid the service tax by reason of collusion, wilful misstatement, suppression of fact or contravention of the provisions of Rule with intend to evade payment of service tax and they have been filing the returns regularly - no penalty is imposable on the appellant u/s 78 of the FA because the condition for imposing the penalty under Section 78 is not present in this case and it was an interpretational issue and therefore, the penalty under Section 78 on the appellant dropped. Appeal allowed in part.