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2019 (9) TMI 73 - AT - Service TaxCENVAT Credit - common input services used for manufacture of dutiable goods and for providing the exempted service - non-maintenance of separate records - Rule 6 of the CENVAT Credit Rules 2004 - Penalty u/s 78 - HELD THAT:- The impugned order imposing penalty under Section 78 equal to the proportionate credit is not sustainable in law because of the fact that there was no suppression with intention to evade payment of duty. Further, in the earlier audit for the period August 2009 to July 2014 , the Department did not raise any objection in spite of the fact that the Department was aware of the input credit, which the appellant was availing. It is only during the subsequent audit that this objection was raised and the present show-cause notice was issued. The appellant is entitled to avail the benefit of less penalty provided under Second proviso to Section 78(1) of the Act which he has rightly availed. The order of the Commissioner(Appeals) is contradictory when he says that payment of interest and penalty is found to be correct as per the provisions of Rule 14 of CCR, Section 78 of the Finance Act, 1994 and Rule 15(3) of the CCR and also observed that it needs no interference. But thereafter, he also imposed equal penalty under Section 78 which according to my considered opinion is not sustainable. Further the appellant is entitled to avail the benefit of less penalty provided under Second proviso to Section 78(1) of the Act which he has rightly availed. The order of the Commissioner(Appeals) is contradictory when he says that payment of interest and penalty is found to be correct as per the provisions of Rule 14 of CCR, Section 78 of the Finance Act, 1994 and Rule 15(3) of the CCR and also observed that it needs no interference. But thereafter, he also imposed equal penalty under Section 78 which according to my considered opinion is not sustainable. Appeal allowed - decided in favor of appellant.
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