2010 (8) TMI 444

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..... 113 of service tax for denial of CENVAT credit and various penalties under sections 76, 77 and 78 of the Finance Act, 1994.   2. The facts of the case are that the appellants are engaged in the development of internet application like website designing, domain name registration, web hosting, etc. and are in partnership with VSNL for selling their bandwidth business. For these businesses, the .....

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..... ts appearing for the appellants submitted that the appellants were not aware of their service tax liability. In fact, the appellants were under the impression that the activity undertaken by the appellants does not fall under the Business Auxiliary Services as the Service Tax Laws are not cleared to the assessee. He further submitted that when the department pointed out to the appellants, they imm .....

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..... e credit taken between February 2004 to 10-9-2004 is not available to the appellants. He further submitted that the appellants were well within the knowledge of the applicability of the service tax liability on the appellants. Hence the penalties have been rightly imposed on them.   5. Heard and considered.   6.1 On careful examination of the records and submissions made by both sides, .....

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..... ion. In fact CENVAT Credit Rules clarifies that the assessee is available for CENVAT credit which is applicable to them within the provisions of CENVAT Credit Rules, 2004 or Service Tax Credit Rules, 2002. Accordingly, the learned DR also agreed that CENVAT credit is available to the appellant with effect from 10-9-2004 when the CENVAT Credit Rules, 2004 came into force but I find in this case the .....

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..... Finance Act, 1994 for waiver of penalty.   8. As the appellants has been able to satisfy with reasonable cause not to pay the service tax prior to search in their premises, the appellants are entitled for the benefit of section 80 of the Finance Act, 1994. Accordingly by giving benefit of the same, the penalties are also waived on the appellants.   9. With these observations, the impug .....

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