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2015 (10) TMI 1739 - CESTAT NEW DELHI

2015 (10) TMI 1739 - CESTAT NEW DELHI - 2015 (40) S.T.R. 1153 (Tri. - Del.) - Cenvat Credit - Distribution of input services / ISD The department was of the view that appellant having various other branches and advertisement services being common to all units the credit has to be availed on proportionate basis. - Held That:- Rule 7 does not speak of distributing credit on proportionate basis; thus credit rightly availed - the appellant failed to take ISD registration it would amount only to a .....

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ents thus imposition of penalty cannot be imposed on flimsy and shaky evidence Decided in favour of assessee. - Appeal No. ST/50467/2015-ST(SM) - Final Order No. A/52797/2015-SM(BR) - Dated:- 7-9-2015 - Sulekha Beevi CS, Member (J) For the Appellant : Shri Yogendra Aldak, Adv For the Respondent : R K Gupta, DR ORDER Per Sulekha Beevi CS Brief facts are as under: 1. The appellants are authorized dealers of Maruti Suzuki India Ltd. They are engaged in sale as well as repair, maintenance and se .....

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/- was paid later after issuance of show cause notice. The audit report had also directed the Range Superintendent to examine past records. Accordingly, the Range Superintendent issued letters requesting the appellant to furnish information/documents. Summons were also issued. It is the case of the department that appellant failed to respond to the letters and summons. A show cause notice was issued alleging wrongful availment of CENVAT Credit and also failure to furnish information/documents an .....

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the same was upheld except for reducing the penalty imposed under Rule 15 to equal amount of penalty. The appellant is thus before the Tribunal. 2. The first allegation is that appellant wrongly availed credit of ₹ 44,056/-. According to the department, the 'advertisement services' on which the credit was availed, being input service for other branches also, the appellant was entitled to avail the credit on proportionate basis only. Appellants agreed to the objections and reversed .....

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ts providing output service. However, such distribution is subject to two condition only: a. That the credit distributed should not exceed the amount of service tax paid; b. That credit of service tax attributable to service used by units exclusively engaged in manufacture of exempted goods or providing of exempted goods services shall not be distributed. 4. Apart for the above two conditions, the Rule does not provide any other restrictions during the disputed period. The argument of he appella .....

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he imposition of penalty on this count is not sustainable. 5. The next issue to be addressed is the imposition of penalty under Section 77 (1) (c) of Finance Act, 1994. In addition to the audit objection regarding the credit availed as discussed above, the auditors had directed the jurisdictional range officer to collect figures related to GTA services for the years 2007-2008, 2008-2009, figures related to consultancy fees paid for different years and also details of rent paid by appellant to M/ .....

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of the authorities below and argued that penalty has been rightly imposed. 6. On behalf of the appellant, the learned counsel submitted that vide letter dated 17.03.2011 the appellant had replied to the audit objections and also informed that the credit (Rs. 44,056) has been reversed. A further letter dated 15.06.2012 was issued by the Department raising very same queries, to which the appellant replied vide reply letter dated 10.07.2012. Appellant did not reply to the letter dated 30.07.2012 an .....

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t is seen that appellant vide reply letter dated 17.03.2011 has clarified appellant's views/response to the audit objections raised. Regarding the credit availed, the appellant replied informing that the same is reversed. The appellant gave further information/explanation vide reply dated 10.07.2012. In all the subsequent letters, the queries regarding the very same audit objections are seen raised by the Department. The primary adjudicating authority observed that the appellant failed to re .....

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penalty is imposed under section 77 (1) (c) (ii), the respondents have to state specifically which document was called from the appellant. The show cause notice does not specify the document that was called for. Imposition of penalty being in the nature of punishment, the same cannot be imposed on flimsy and shaky evidence. The respondents do not have a case that they were obstructed from conducting a search or that a specific document was withheld resulting in particular revenue implication. T .....

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