TMI Blog2014 (8) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... 2004 to September 2007 in their Cenvat Credit account. - lower authorities directed to allow the appellant to avail Cenvat Credit of an amount of ₹ 51,85,498/- as appellant has made good the said amount by paying it in cash. Levy of penalty - waiver of penalty u/s 80 - Held that:- appellant could not be charged with intentional evasion of service tax liability by utilizing excess amount of the Cenvat Credit for discharging service tax liability, in as much that there is no dispute that appellant had sufficient balance in the Cenvat Credit account. - the penalties imposed by the adjudicating authority under Section 76 and 78 of the Finance Act, 1994, are very harsh and unwarranted - the appellant is subsidiary of a Government of G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maintained separate accounts in respect of receipt, consumption and inventory of input services used in both the categories. It was noticed by the lower authorities that appellant utilized whole of the Cenvat Credit of service tax towards payment of service tax liability on the taxable output services while they were eligible to use only 20% of the amount of service tax payable from Cenvat Credit. This contravention was noticed by the lower authorities for the period of October 2005 to September 2007. Show cause notice dt. 21.12.2009 was issued to the appellant directing them to show cause as to why the demand of an amount of ₹ 51,85,498/- be not raised on them alongwith interest and penalties be not imposed for improper utilization o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the word service used in the definition of exempted services in the second limb has to be read with taxable service. It is his submission that various case laws though pertaining duty of central excise would support his case. He relies on: (a) Siddeshwari Cotton Mills (P) Ltd. Vs. Union of India Anr. - 1989 (39) ELT 498 (SC), (b) CCE, Bombay Vs. Maharashtra Fur Fabrics Ltd. - 2002 (145) ELT 287 (SC), (c) Oswal Agro Mills Ltd. Vs. CCE - 1993 (66) ELT 37 (SC), (d) Rohit Pulp and Paper Mills Ltd. Vs. CCE - 1990 (47) ELT 491 (SC), (e) Commercial Taxes Officer, Anti Evasion, Circle-II, Jaipur Vs. MRF Ltd. - 2009 (235) ELT 802 (Raj.). 4. He would also submit that the entire demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the appellant had devised a scheme deliberately to evade tax liability and hence the ratio of that case would definitely apply in that case. 7. We have considered the submissions made at length by both sides and perused the records. 8. At the outset, we would like to record the undisputed facts that the appellant is registered with the authorities for discharge of service tax liability on a specific output services provided by them. They are also availing the benefit of Cenvat Credit of the service tax paid on input services. It is also undisputed that the appellant had paid the entire amount of the demands which are confirmed by them through PLA as also through their RG-23A are to account. 9. On perusal of the records, we find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04 to September 2007 in their Cenvat Credit account. We direct the lower authorities to allow the appellant to avail Cenvat Credit of an amount of ₹ 51,85,498/- as appellant has made good the said amount by paying it in cash. 14. As regards the penalties imposed, we find that during the material period, there could be a confusion in the mind of the appellant as to whether digital signature certification services rendered by them would get classified under the category of exempted services or not. It is seen from the records that the authority i.e. office of controller of certifying authorities had specifically informed the appellant herein that the services rendered by them would not fall under the category of taxable service eithe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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