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TMI Blog2017 (4) TMI 754X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest thereon, while setting aside the penalty under section 78 of Finance Act, 1994, the penalty under rule 15 (3) of CENVAT Credit Rules, 2004 and the demand of Rs. 26,48,040/- representing CENVAT credit availed. 2. The demand confirmed in the impugned order relates to tax liability on the consideration for providing of 'health and fitness service' between January 2008 and July 2008 that had been paid alongwith interest belatedly in July and August 2008; allegedly this amount had been collected but not deposited to the credit of the Central Government. The appeal of Revenue relates to the dropping of penalty as well as the allowing of CENVAT credit of Rs. 26,48,040/- and it is contended that this credit pertain to 'exercise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd submissions of Learned Counsel for respondent also. 5. We observe that the assessee runs a gymnasium for which 'exercise equipment' is an essential requirement and that the two branches of the assessee, registered individually as service providers, had availed CENVAT credit on the equipment in 2005-06 and 2006-07. The notice issued by the jurisdictional tax authority on 23rd March 2011 has alleged suppression of fact with intent to evade tax and thus within the exclusion envisaged in section 73(4) of Finance Act, 1994. Though the original authority had imposed penalty under section 78 of Finance Act, 1994, the impugned order, though observing that the mandated penalty was statutorily restricted to 25% if tax and interest liability were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he contention of the respondent that it was merely for a short period to which the demand pertains would lead us to conclude that there was no intent to evade payment of duty. Invoices were issued and the receipts were duly recorded in the books of accounts thus detracting from the allegation that there was any suppression. Moreover, it would appear that the assessee had been discharging tax liability before and after this short period of non-payment of tax. The respondent was also prompt in making good the defect in not paying the tax. Considering the circumstances, we hold that no case been made out for invoking the provisions of section 78 of Finance Act, 1994. Consequently, we hold that this was a fit case for not issuing a show cause n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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