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2023 (8) TMI 848 - AT - Service TaxContravention of the condition imposed under the Notification No. 01/2006 - CENVAT Credit availed - demand along with interest and penalty denying the benefit of notification - HELD THAT:- Admittedly the fact of Cenvat Credit and utilization of the same has been recorded by the Appellant in their ST-3 Returns. Only on the basis of scrutiny of these Returns, the Department has issued the Show Cause Notice. Therefore, this proves that the Appellant has not suppressed any fact but has declared the details of Cenvat Credit taken and their utilization in the ST 3 Returns. Therefore, their explanation that this was an inadvertent error on their part, is to be accepted. It is also seen that after the OIO was passed, they have reversed the entire Cenvat Credit. In the present case, the Appellant has reversed the entire Cenvat Credit taken. Therefore, the confirmed demand of Rs.22,13,962/- along with interest is required to be set aside. However, as pointed out by the Learned AR, it is seen that the Appellant has only reversed the Cenvat Credit without paying the relevant interest - the Appellant is required to pay the interest for the period when the Cevat Credit was taken till the time they have reversed the Cenvat Credit, as per the applicable rate of interest at that particular point of time. Since the Appellant has contravened the conditions imposed under in the Notification, they cannot be absolved from penalty and they are also required to pay the penalty - thus they are required to pay penalty of Rs.1.25 lakhs. Appeal allowed in part.
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