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2015 (3) TMI 297 - AT - Central ExciseCENVAT Credit - suppression of facts - house keeping & dry cleaning service, event management service and legal service - Held that:- Regarding event management service, appellants contended that in their own case vide [2015 (1) TMI 294 - CESTAT NEW DELHI] the credit in respect of taxies used for carrying their employees for the function in respect of which the event manager was engaged has been allowed. When credit of service tax paid on taxi service utilised for carrying their employees for the function has been allowed, the credit of service tax in respect of event management service engaged for the same function has to be allowed mutatis mutandis. It has been stated that the function was in relation to business as the outstanding employees working in the factory were honored by way of rewarding and entertaining them to encourage the employees in general for better performance; it was an annual day function which is organized every year. Thus the function does have relation to business of manufacture. The appellants cited the judgment of Karnataka High Court in case of Toyota Kirloskar Motor Ltd. v. CCE, LTU, Bangalore, [2011 (3) TMI 1373 - KARNATAKA HIGH COURT]. In the said judgment Hon’ble High Court of Karnataka has in effect held that organising such a function cannot be separated from business of manufacture of final product. That such credit is allowable is also evident from the Cestat judgment in case of Endurance Technologies Vs. CCE Aurangabad [2013 (8) TMI 601 - CESTAT MUMBAI] which allowed credit in respect of mandap keeper for the annual day function. Thus denial of credit in respect of event management service in this case cannot be sustained. As regards mandatory penalty, the adjudicating authority has stated that it is settled principle of law that in taxation matters mens rea is not an essential factor for imposition of penalty and therefore penalty is imposable under Rule 15 of Cenvat Credit Rules read with Section 11AC of Central Excise Act. This observation is obviously untenable because for Section 11AC ibid wilfull mis-statement/suppression has to be brought out and this necessarily involves mens rea. Indeed, the concerned Order-in-Original does not bring out as to how the appellants are guilty of wilfull mis-statement or suppression of facts. Thus the extended period is also not sustainably invokable in the case as a consequence the demand is also hit by time-bar and mandatory penalty also cannot be imposed. - Decided in favour of assesse.
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