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TMI Blog2008 (2) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... to transport of goods by road, by availing Cenvat credit on other input services. Obviously, they treated GTA service as output service, a fact evident from the service tax returns filed from time to time for the aforesaid period. The department objected to such availment of input service tax credit for payment of service tax on GTA service and accordingly issued a show-cause notice dated 9-3-2006 to the party asking them to reverse Cenvat of Rs. 91,399/- as also to pay service tax of Rs. 36,303/- under Section 73 of the Finance Act read with Rule 14 of the Cenvat credit Rules, 2004 with interest thereon under Section 75 of the Finance Act read with Rule 14. The notice proposed penalty also on the party under Section 76 of the Finance Act r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the appellants is that they are entitled to the benefit of Section 80 of the Finance Act, 1994, which provisions reads as under:- "Notwithstanding anything contained in the provisions of Section 76, 77 or 78 no penalty shall be imposable on the assessee for any failure referred to in the said provisions if the assessee proves that there was reasonable cause for the said failure." In this connection, it has been stated that, as soon as the appellant came to realize their mistake of having deemed the GTA service to be output service, they voluntarily reversed the input service tax credit and paid service tax in cash on GTA service, before the order of adjudication was passed in this case. It has been claimed that, in these circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice tax credit availed. This was done at the hearing stage of the case before the adjudicating authority. Had this been done promptly upon receipt of the show-cause notice, it would perhaps have constituted reasonable cause for purposes of Section 80 ibid. As already noted, what the assessee did was to contest the demand even after having been told of the correct legal position. This attitude can by no stretch of imagination be considered to be reasonable. I am, therefore, of the view that the decision of the revisional authority to impose a penalty on the assessee under Section 76 of the Finance Act, 1994 by rejecting the claim of the assessee under Section 80 of the Act is legally sustainable. It however appears, the revisional authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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