TMI Blog2018 (5) TMI 672X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant, which is the essential ingredient for imposing penalty - penalty cannot be invoked. Appeal allowed - decided in favor of appellant. - Appeal No. ST/85388/2018 - Order No. A/86111/2018 - Dated:- 20-4-2018 - Hon ble Mr. Ramesh Nair, Member (Judicial) Shri Prasad Paranjape, Advocate, for appellant Shri M.P. Damle, Assistant Commissioner (AR), for respondent ORDER The appellants is engaged in the business of providing information technology enabled business process and outsourcing services. Show cause notice was issued alleging the appellant s receipt of hosting and networking services falling under the category of management, maintenance or repair service, management hosting network services from a compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) Rules, 2006. Therefore, under that impression, the appellant did not discharge the service tax in time. He submits that the appellant is a 100% export oriented service provider and their 100% service is exported. Therefore, whatever service tax is paid on the input services, the same is cenvatable and refundable under Rule 5 of the Cenvat Credit Rules, 2004. Therefore, the case is clearly of revenue neutrality. Therefore, the intention to evade payment of service tax does not exist. He placed reliance on the following judgments:- (i) JPB Mills Pvt. Ltd. 2016 (46) STR (Tri.-Chennai); (ii) Punjab Chemicals Crop Protection Ltd. 2017 (47) STR (Tri.-Chand.); (iii) Dinesh M. Kotian 2016 (42) STR 772 (Tri.- Mumbai); ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or to the assessee. In these circumstances, the allegation of intention to evade payment of service tax cannot be made against the appellant, which is the essential ingredient for imposing penalty. In the given facts, the entire case is of revenue neutrality. The judgments relied upon by the learned counsel directly deal with the issue. In the case of JPP Mills Pvt. Ltd. (supra), the Division Bench of this Tribunal has observed as under:- 12. However, we are also of the view that this service is an input service as defined under Rule 2(k) of the Cenvat Credit Rules, 2004 because the service is in relation to sales promotion which is specifically included in the inclusive part of the definition. That being the case, the appellants w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of applicability of the provisions of Section 73(3) of the Finance Act, 1994 to the appellant s case, I find that in this case the appellant, on being pointed out by the DGCEI, deposited the entire amount of service tax liability along with interest on 18-9-2010 much before the issue of show cause notice on 9-2-2011. I find that the appellant is a manufacturer of dutiable goods and the Service Tax paid on services provided by foreign service-providers would have been available to them as Cenvat credit under the Cenvat Credit Rules, 2004 leading to a revenue neutral situation. In the facts and circumstances of this case, it is improper to allege that the appellant did not pay service tax with an intent to evade payment of Service Tax. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re disposed off in above terms. 8. In view of the above observations and settled position of law, I hold that the appellant s case is fully covered by the provisions of Section 73(3) of the Finance Act, 1994 and the Revenue should not have issued show cause notice to the appellant for imposition of penalty. Accordingly, I set aside the penalty imposed upon the appellant under Section 78 of the Finance Act, 1994. In the case of Punjab Chemicals Crop Protection Ltd. (supra), this Tribunal held that since the assessee was entitled for the cenvat credit on the service tax paid on reverse charge mechanism, the case is of revenue neutrality. 5. Following the ratio of the above cited judgments and considering the facts of the presen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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