TMI Blog2015 (4) TMI 575X X X X Extracts X X X X X X X X Extracts X X X X ..... If did not make the credit lapse. Further, the restriction of 20% was removed from 01.04.2008. Therefore, I set aside the demand of ₹ 26,487/-. Levy of penalty - Held that:- the mens rea with definite intent to evade duty is not established - No penalty. Admissibility of CENVAT Credit on insurance, repair and maintenance of motor vehicles. - Commissioner appears to contradict his own statement. On the one hand he says the expenditure has been incurred from the firm's budget whereas on the other hand he comes to a conclusion that no documentary evidence showing use of vehicles for output services, has been produced. - it was never the allegation in the show-cause notice that the vehicles are not use for providing output services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd exempted services as required under Rule 6(2) of the CENVAT Credit Rules. The appellant had two options under Rule 6(3) of the CENVAT Credit Rules - either to pay an amount equal to 8% of the value of the exempted services or pay an amount equivalent to the CENVAT credit attributed to the input services used for providing the exempted services by following conditions and procedure of Rule 6(3A). As they did not follow the conditions of Rule 6(3A), a show-cause notice was issued demanding ₹ 26,487/- being the amount equal to 8% /6% of the value of exempted services. Further, it was also noticed that they had availed and utilised CENVAT credit ₹ 16,204/- on input services of insurance and maintenance of motor vehicles which wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erates the findings of the Commissioner. 6. I have carefully gone through the submissions made by both sides. The first issue to be decided is whether the appellant are required to pay 6% /8% of the value of exempted services under rule 6(3)(i) or they may be allowed to make the payment under Rule 6(3)(ii). Revenue's contention is that payment under Rule 6(3)(ii) can be allowed only when the procedure under Rule 6(3A) is followed. This procedure requires various conditions to be followed as mentioned below:- (a) while exercising this option, the manufacturer of goods or the provider of output service shall intimate in writing to the Superintendent of Central Excise giving the following particulars, namely:- (i) name, address an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y month. This was not done by the appellants. No assessee would intentionally evade payment of ₹ 927/-. The appellant have pleaded ignorance about the new provisions and continued to restrict utilisation of CENVAT credit to the tune of 20% as per previous provisions of law. In any case Rule 6(3) only restricted availment of credit upto 20%. If did not make the credit lapse. Further, the restriction of 20% was removed from 01.04.2008. Therefore, I set aside the demand of ₹ 26,487/-. In the facts and circumstances of the case, I find that the mens rea with definite intent to evade duty is not established. And once mens rea is not established, imposition of penalty under Rule 15(3) of the CENVAT Credit Rules does not sustain in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re has been incurred from the firm's budget whereas on the other hand he comes to a conclusion that no documentary evidence showing use of vehicles for output services, has been produced. Therefore, I do not agree with the Commissioner's finding. In any case it was never the allegation in the show-cause notice that the vehicles are not use for providing output services. The allegation in the show-cause notice is vague as is states that the insurance maintenance of motor vehicle on which the Service Tax credit is availed appears to be not input services and therefore credit of the same is inadmissible as per provision of CENVAT credit Rules, 2004. The allegation in the show-cause notice is not definitive nor substantiated in any ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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