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2018 (2) TMI 832

Penalty - CENVAT credit - sister units - case of appellant is that inasmuch as, they were sharing their services with their own sister Unit, they were under a bonafide impression that they are entitled to the entire service tax so paid, even though, a part of the tax was being collected from their sister Unit - Held that: - in the absence of any specific allegations and evidence to show that the appellant was availing the credit with malafide intention, their plea of bonafide needs acceptance. Inasmuch as, both the Units were belonging to the same appellant, there could be a belief on their part that the service tax paid by them in respect of the entire services is available to the appellant as credit. As soon as the same was pointed out by .....

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the period from 2005-06 to 2009-10. After due process of law, the respondent vide the impugned order confirmed the entire service tax demand made under the extended proviso to section 73(1) of the Finance Act, 1994 and appropriated all the service amount and interest paid by the appellant. This apart, he imposed penalty equal to the service tax demand under section 78 of the Finance Act, 1994. 2. Aggrieved by the said order of the original adjudicating authority, appellant filed an appeal before Commissioner (Appeals) which stands dismissed by him by observing as under:- "The facts not in dispute are that the appellant had shared certain common services between their sister Units, who operated from the same premises as that of the appe .....

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r (e) contravention of any of the provisions of this Chapter or of the rules made there under with intent to evade payment of service tax. 4. From the above, it is clear that the provisions of section 73(3) would be applicable only to cases not involving elements like fraud, collusion, suppression of facts etc. In the instant case, the entire issue had emanated through special audit conducted by the department and after verification of private records of the appellant. The various issues involved came to light only through sustained investigation and in-depth study of the records and other correspondences of the appellant and as already stated the appellant had failed to declare the correct facts in their ST-3 returns filed with the departm .....

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