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Bank of India, Visakhapatnam Versus CCE, C & ST, Visakapatnam

2017 (4) TMI 896 - CESTAT HYDERABAD

CENVAT credit - duty paying documents - Held that: - appellants have availed CENVAT credit on VAT and also on the personal telephone calls used by employees and also in some cases they have taken credit by double entry. Credit has been taken on documents for purchase of items and not on service tax. In certain cases, no documents have been furnished at all. The appellants, therefore, have no case on merits. - SCN has been issued invoking the extended period of limitation alleging suppression .....

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k, Dy. Commissioner/AR for the Respondent ORDER [Order Per Ms. Sulekha Beevi, C.S.] 1. The appellants are public sector bank and have service tax registration for rendering banking and other financial services. On verification of records, it was noticed by the department that during the period 10.09.2004 to 31.03.2007, the appellants had availed CENVAT credit on improper documents and in some cases without any documents at all. A Show Cause Notice dated 15.07.2008 was issued alleging irregular a .....

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al, vide order impugned herein, the Commissioner (Appeals) set aside the penalties imposed invoking Section 80 of Finance Act,1994. The appellant is before the Tribunal challenging the demand of CENVAT credit to the tune of ₹ 72,547/-. 2. On behalf of the appellant, Ld. Counsel Ms. A.S.K. Swetha submitted that she is confining the arguments on grounds of limitation only. That the appellant had availed credit on certain documents which were not proper. In some cases they had taken credit by .....

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of facts with intent to evade payment of tax is not justifiable. That, therefore, the entire demand has to be set aside on the grounds of limitation. In support of her prayer, she relied upon the judgement in the case of R.N. Singh Vs Commissioner of Central Excise, Allahabad [2012 (28) STR 13 (Tri.-De)]. It is her contention that Section 73 has to be read alongwith Section 80 in a harmonious manner. Since the Commissioner (Appeals) has recorded a finding that the appellant does not have intenti .....

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by them which is totally inadmissible. He has pointed out that the appellant has availed irregular credit by suppressing facts of availing credit. That the Commissioner (Appeals) has only applied section 80 of Finance Act, 1994 observing that the appellant has put forward reasonable cause for availing irregular credit and thereby set aside the penalty imposed under section 78 of Finance Act, 1994. 4. I have heard the submissions made before me. The allegation raised in the show cause notice is t .....

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ty. (v) No document furnished. (vi) Bill with incomplete particulars (vii) Invalid document. (viii) Document is for purchase of items and not for service tax. 5. Thus, from the above, it is seen that appellants have availed CENVAT credit on VAT and also on the personal telephone calls used by employees and also in some cases they have taken credit by double entry. Credit has been taken on documents for purchase of items and not on service tax. In certain cases, no documents have been furnished a .....

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unts which they have agreed to be not eligible. There is no reply with regard to the specific observations made and non-availability of documents mentioned. Hence the appellants arguments on paper without any evidence on record are baseless. However, with regard to the penalties, I am of the view that there can not be any intent on the appellants part to evade service tax as they are not familiar with the law as could be evidenced by the facts that they have taken credit of VAT, VAT on purchase .....

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sioner (Appeals) has found that there is no intention on the part of appellant to evade payment of service tax and the availment of irregular credit was only because they were not familiar with the law. The penalty imposed under Section 78 has, thus, been set aside. The department did not file any appeal on such findings. In the decision relied upon by the Counsel for appellant, the Tribunal has discussed similar issue and observed that Section 80 has to be harmoniously read alongwith Section 78 .....

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ilure referred to any Section 76, 77 or 78 of the Act, if the assessee proves that there was reasonable cause for the said failure. The demand of duty stands invoked and confirmed in terms of Section 73 of the Finance Act. The proviso to Section 73 of the Finance Act allows the Revenue to raise the demand within the extended period of 5 years for fraud, wilful mistake, suppression of facts or contravention of provisions of the Act, with intent to evade payment of duty. As such, it is clear that .....

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of the present case, the said facts leads to only one situation i.e. presence of reasonable cause on the part of the assessee, which would include absence of mala fide. If that be so, the proviso to Section 73 would not be available to the revenue. The contention of the learned AR that Section 73 and 80 operate in different fields cannot be appreciated as discussed above. 9. I also note that Tribunal in the case of Indian Petrochemicals Corporation Ltd. Vs. CCE, Vadodara reported as [2009 (237) .....

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