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2018 (12) TMI 863 - CESTAT MUMBAIReversal of CENVAT Credit - Rule 6(3A) of the CENVAT Credit Rules - Held that:- Appellants are providing both taxable and exempted output services. They avail of the CENVAT Credit in respect of various inputs and input services, used by them for providing the output services. Since they are not maintaining the separate accounts in respect of the inputs/ input services consumed by them for providing taxable/ exempted output services they reverse the credit availed by them, as provided for by rule 6(3A) of the CENVAT Credit Rules, 2004. Since Appellants themselves admit to taking the excess credit they at certain points of time and have subsequently adjusted the same, they are required to pay interest during the period they had taken the excess credit. It is quite evident that appellants themselves are also not disputing the facts that they had availed excess credit at times and had also short paid the service tax due. The claim of the appellant that they have reflected the said service tax liability in their ST-3 return and had also paid the same by showing the debit entries in their return from the CENVAT Credit account is nothing but a hollow argument as they had not filed the ST-3 returns by the due date. These returns for the year 2008-09 and 2009-10 as per their own admission have been filed only in the year 2010-11. Since these returns have been filed not by the due date but after the delay of one to two years, appellant had deliberately being suppressing their tax liability and evading the payment of tax. Intention to evade payment of tax which very clear, from the manner they manipulated the ratio for reversal of credit. Demand of Interest - Held that:- Appellants have by not computing the amount of reversal, appropriately have short reversed the credit initially taken by them resulting in excess credit with them. Reversal by way of debit entry in the CENVAT credit account is utilization of the Cenvat Credit taken - interest rightly demanded. Penalty - Held that:- Since appellants have in fact suppressed the facts by not filing the ST-3 return with the intention to evade payment of Service Tax, all the ingredients for invocation of the Section 78 of the Finance Act, 1994 satisfied in the present case - all the ingredients for invoking extended period are available, Section 78 for imposing mandatory penalty is invokable. Appeal allowed in part.
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