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2018 (11) TMI 463 - AT - Service TaxCENVAT Credit - trading activity or not? - credit availed on purchase of the devices viz., “CR-200B device”, which was not used for providing any output service but used only for trading purposes - Held that:- The arguments of the learned counsel for the appellants that the devices were transferred to the customers on hire/free of cost is not tenable in law because the appellants have issued the invoice on which they have paid VAT under the Karnataka VAT Act - further, the assessee has not maintained the proper record of inventory used and inventory traded - the appellant has also not been able to provide documentary evidence to show CR-200B devices in question have been used to provide output service to their clients - credit cannot be allowed. Penalty u/s 78 - Held that:- There was ambiguity in the issue and it relates to interpretation of law - also, the appellants have provided all the information to the audit party and the matter came to the light during the audit only from the records submitted by the appellant wherein they have disclosed the availment of CENVAT credit there - penalty not warranted. Appeal allowed in part.
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