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2016 (4) TMI 983 - CESTAT MUMBAI

2016 (4) TMI 983 - CESTAT MUMBAI - 2016 (42) S.T.R. 565 (Tri. - Mumbai) - Reversal of Cenvat credit, payment and interest therefore - Business Auxiliary Service - Section 65 (19) of the Finance Act, 1994 - Misuse of facility of Cenvat credit by taking credit on input/input service used and input services not utilized for providing output services - Held that:- Ld. Commissioner has accepted the application dated 27.3.2009 submitted by the respondent under Section 73(3) of the Act, 1994 and droppe .....

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ve succeeded on merits. Moreover, it is beyond imagination that the entire Cenvat credit availed by them was liable to be disallowed. Taking into consideration of all these aspects, we are not interfering in the reversal of Cenvat credit, payment and interest thereof but respondent has clearly made out a fit case under Section 73(3) of Finance Act, 1994, according to which the department should not have issued show cause notice. Therefore, there could not be better case than the present case for .....

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ner of Central Excise, Pune-III, wherein Ld. Commissioner dropped the proceedings against the respondent. 2. The fact of the case is that the respondent are provider of taxable services mainly under the category of Business Auxiliary Services as defined under Section 65 (19) of the Finance Act, 1994, in addition to various other services. The respondent is registered with service tax cell and paying service tax. During the course of audit undertaken by the department, the ledgers of Cenvat on Ca .....

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2,970/-. On payment of such amount appellant submitted an application dated 27/3/2009 to conclude the proceedings. However, the department issued show cause notice on 22/10/2009 which was culminated into adjudication order wherein Ld. Commissioner has dropped the proceedings accepting the application dated 27/3/2009 filed by the respondent for concluding matter under Section 73 (3) of the Finance Act. Being aggrieved by the said impugned order, Revenue filed this appeal. 3. Shri. R.K. Das, Ld. D .....

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nvat credit on the input services. He submits that Cenvat credit reversed by the respondent is for the extended period therefore proviso to Section 73(1) was invoked in the case of fraud, suppression, willful misstatement etc., the immunity under Section 73(3) cannot be provided. For this reason Ld. Commissioner has erred in dropping the proceedings by accepting the application under Section 73(3). 4. On the other hand, Shri. Jitu Motwani, Ld. Counsel for the assessee vehemently argued that from .....

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there is no dispute about the payment of Cenvat credit alongwith interest, the only issue is whether the penalty could have been imposed. He further submits that in the appeal of the Revenue it was submitted that the Commissioner should not have dropped the proceedings under Section 73(3) however no specific prayer was made that what else could have been done by Ld. Commissioner. He placed reliance on judgment of Tribunal in the case of Bhoruka Aluminium Ltd Vs. Commr. of C. Ex., Mysore [2008 ( .....

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no show cause notice could have been issued. On going through the nature of services and fact, we find that Cenvat credit admissibility on the subject input services was contentious issue. The respondent could litigate the matter and they could have succeeded on merits. Moreover, it is beyond imagination that the entire Cenvat credit availed by them was liable to be disallowed. Taking into consideration of all these aspects, though, we are not interfering in the reversal of Cenvat credit, paymen .....

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d as providers of Business Auxiliary Services and other services. They availed of cenvat credit on inputs and input services provided not only to them but to their group companies also. Further they availed of input service credit in respect of input services which were allegedly not utilized for providing output services. The noticee has paid the entire amount of impugned service tax credit through reversal of cenvat credit balance amounting to ₹ 1,65,61,869/- and through cash of ₹ .....

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