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2019 (6) TMI 794 - AT - Service TaxPenalty u/r 15 (3) of the Cenvat Credit Rules, 2004 and section 78 of FA - CENVAT Credit - reversal of credit in terms of Rule 6(3) of the CENVAT Credit Rules, 2004 - HELD THAT:- It is a matter of record that before the Audit party visited the appellant between 27.10.2010 to 02.11.2010, the appellants have already reversed back the cenvat credit amounting to ₹ 50,25,246/- in compliance to the requirement of Rule 6(3) of Cenvat Credit Rules, 2004 and same was reflected in the financial accounts including the balance sheet for financial year 2009-2010. It was only on comparison of balance sheet and the ST 3 returns which have been filed by the appellant that the Audit party pointed out that the reversed back amount of Cenvat credit has not been shown as ‘reversed back’ in their ST 3 return for the relevant period. The appellant while filing ST 3 return for period covering October, 2010 to March, 2011, which was filed on 25 April, 2011, the reversal of Cenvat credit amounting to ₹ 50,25,246/- had properly been reflected in the ST 3 return. Equal amount of penalty under Rule 15 (3) of the Cenvat Credit Rules, 2004 - HELD THAT:- The intention of the appellant have never been to misuse the cenvat credit or evade service tax on account of same and therefore, primarily we feel that since they have already reversed the cenvat credit and have also paid interest, there was no need to issue show cause notice left aside invoking the provisions of Rule 15 (3) of the Cenvat Credit Rules, 2004 for imposition of equal amount of penalty. Penalty u/s 78 - HELD THAT:- The facts in this matter indicate that the appellant on its own reversed back the cenvat credit and has reflected the same in their financial books of accounts. There have also been correspondence between the officers of the Department and the appellant which indicate that the appellants have always having credit in their account much more than what was required to be reversed and if such credit have been reversed on its own by the appellant, it will amount to non-taking of the cenvat credit. Since the original amount of credit was already reversed as the assessee had claimed that they always had credits in accounts much above the required amount, the credits in a way have not been utilized by the assessee. The penalty under section 78 of Finance Act, 1994 read with Rule 15(3) of Cenvat Credit Rules, 2004 is not imposable in the facts of this matter - appeal allowed - decided in favor of appellant.
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