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2015 (11) TMI 1043 - CESTAT BANGALORE

2015 (11) TMI 1043 - CESTAT BANGALORE - TMI - Levy of Penalty u/s 78 - Invocation of Section 80 - whatever was suggested by the audit party and reversed the cenvat credit taken along with interest - show cause notice was issued with the wrong name as M/s. Gland instead of the name of appellant - Held that:- In the SCN it has been stated that M/s. Gland has not disclosed the details. Therefore the appellant could have easily contested this saying that if Gland has not disclosed the details how ca .....

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he statutory provisions have not been considered and decisions cited have not been discussed. - this is a fit case for waiver of penalty under Section 80 of Finance Act 1994 and accordingly penalty imposed on the appellant are set aside. - Decided in favour of assessee. - ST/2430/2010-SM - Final Order No. 20839 / 2015 - Dated:- 20-3-2015 - Mr. B.S.V. Murthy, Technical Member For the Petitioner : Mr. B. Venugopal, Advocate For the Respondent : Mr. N. Jagdish, AR ORDER Modern technology and the co .....

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lained each item of the credit. a) Appellant had availed cenvat credit on motor vehicles falling under Chapter 87 amounting to ₹ 2,83,562/- (Rupees Two Lakhs Eighty Three Thousand Five Hundred and Sixty Two only). The learned counsel agrees that this was wrongly taken by mistake. b) An amount of ₹ 5,20,474/- (Rupees Five Lakhs Twenty Thousand Four Hundred and Seventy Four only) being cenvat credit availed on input services received from abroad was held to be inadmissible. The learned .....

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art of the appellant and they had not noticed that they were simply taking credit without segregating the same properly. d) An amount of ₹ 1,73,442/- (Rupees One Lakh Seventy Three Thousand Four Hundred and Forty Two only) was agreed to have been wrongly taken since during the relevant time output service was not taxable and the services could be identified as the one used for such service. The learned counsel submitted that this was a mistake on the part of the appellant. Total amount cam .....

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tention to evade payment of service tax. The issue of irregular availment has come to the notice only after the accounts of the assessee were audited. M/s. Gland has not disclosed the same in their returns filed with the Department. In view of the above, the cenvat credit irregularly availed by the assessee is to be disallowed under Rule 14 of the Cenvat Credit Rules, 2004 read with proviso to Section 73(1) of the Finance Act 1994. 3.1. It can be seen that this is the paragraph which is the foun .....

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epted it as a typographical error and this issue has never been raised. 3.2. Further it is also seen that in paragraph 7(iv), the show-cause notice proposes why penalty should not be imposed on the amount of ₹ 27,67,720/- under Rule 15(4) of Cenvat Credit Rules 2004 read with Section 78 of the Finance Act 1994. 3.3. The appellants had contended before the original authority and had cited several decisions to support the submission that since they have paid the eligible credit with interest .....

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9.2009 that since the Rule 14 of the Cenvat Credit Rules, 2004 is clear and unambiguous in the position that interest would be recoverable when cenvat credit is taken and utilized wrongly, it is clarified that interest shall be recoverable when credit has been wrongly taken, even if it has not been utilized, in terms of wording of the present Rule 14. As I am bound by the above Board Circular, I am fully convinced that interest under Rule 14 read with Section 75 of the Act, is payable by them. .....

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ion 78 of the Act, I abstain from invoking Section 76 of the Act, as per proviso to Section 78, which reads as that if the penalty is payable under this Section, the provisions of Section 76 shall not apply . 3.4. There is absolutely no discussion as to why he is agreeing with the submission that once the amount of irregular cenvat credit has been reversed with interest no penalty is leviable. He is only talking about interest as can be seen by the paragraph. Subsequently he reproduced the provi .....

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the decisions are considered or not and why the penalty is being proposed and what exactly of the provisions in Section 73 relating to suppression and under what circumstances penalty under Rule 15 can be imposed even if the amount has been paid before issue of show-cause notice. 3.5. In the order-in-appeal, the observations relating to decisions are contained in paragraph 8. For better appreciation the paragraph is reproduced. 8. As regards imposition of penalty of ₹ 27,67,720/- (Rupees .....

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e lower authority in the impugned order held that it is clear in the Cenvat Credit Rules, 2004 the Rule 15(1) says if any person takes Cenvat Credit in respect of inputs and capital goods wrongly or in contravention of any of the provision of Cenvat Credit Rules, such person shall be liable to a penalty . He further held that, I proceed to levy penalty under Section 78 of the Finance Act 1994 as the assesses have availed credit irregularly and such irregularity could not have come to the notice .....

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argo Consultant [2009 (15) STR 43 (Tri.-Del.)], the relevant portion of which is as follows: I agree that waiver of penalty cannot be granted just because the service tax had been paid prior to the issue of show cause notice. But if the non-payment of service tax was due to some bona fide reason on the part of the assessee and the assessee on being pointed out paid the service tax, the waiver of penalty under Section 76, 77 or 78 would be merited. Here also the Commissioner (Appeals) is agreeing .....

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