TMI Blog2018 (11) TMI 463X X X X Extracts X X X X X X X X Extracts X X X X ..... cumentary evidence to show CR-200B devices in question have been used to provide output service to their clients - credit cannot be allowed. Penalty u/s 78 - Held that:- There was ambiguity in the issue and it relates to interpretation of law - also, the appellants have provided all the information to the audit party and the matter came to the light during the audit only from the records submitted by the appellant wherein they have disclosed the availment of CENVAT credit there - penalty not warranted. Appeal allowed in part. - ST/20495/2018-SM - Final Order No. 21701/2018 - Dated:- 30-10-2018 - MR. S.S GARG, JUDICIAL MEMBER Mr. Mukesh Shah, CA For the Appellant Mr. Gopa Kumar, AR For the Respondent ORDER Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8(1) of the Finance Act, 1994. After due process, the Assistant Commissioner vide Order-in-Original dated 05.01.2017 confirmed the demand of ₹ 7,06,861/- along with interest and also imposed penalty of ₹ 7,06,861/- under Rule 15(3) of CCR read with Section 78(1) of the Finance Act, 1994 and also appropriated an amount of ₹ 22,807/- already paid. Aggrieved by the said order, the appellant filed an appeal before the Commissioner (A) who rejected the said appeal. 3. Heard both sides and perused the records of the case. 4. Learned counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without properly appreciating the facts and the law. He further submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit is taken as per their record but he admitted that the assessee has failed to maintain proper records of inventory used and inventory traded which is only a procedural lapse and substantial benefit should not be denied on the grounds of procedural lapse. He further submitted that due to ambiguity under Karnataka VAT laws on taxability of such transfer of devices to customers, the appellant decided to raise invoices and paid VAT liability. He also prayed that the penalty or interest should not be imposed as there was no intention and the issue relates to interpretation. 5. On the other hand, the learned AR defended the impugned order. 6. After considering the submission of both the parties and perusal of the material on record, I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture of the Transfer of such goods to the customers. Such renting of the devices may be called as transfer of right to use. But if such transfer of right to use involved transfer of both possession and control of the goods to the user of the goods then VAT is payable on such activity as this is considered as deemed Sale. Therefore, I find that there is no ambiguity in the levy of VAT law as claimed by the appellant. 14. It is admitted by the appellant that they have discharged VAT/CST liability on the devices given to the customers on hire/testing basis. So in the present case, the fact that the appellant has discharged VAT on the devices given to the customers in hire/test basis, implies that the transfer involves both possession a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is contention of the appellant with reference to the findings of the Original Authority on the question of time bar. The Original Authority held that the appellant is professionally managed company and it should have followed the provisions of Finance Act, 1994 to comply with the payment of Service Tax in time. He rejected the contention of the appellant with reference to their bona fide belief. We note that in the present case, the dispute involved is liability of the appellant for Service Tax for providing vehicles on long term lease basis to various clients. Admittedly, there is a provision in VAT Law for taxing the deemed sale of motor vehicles in certain cases of long term lease arrangement. It is clear that the tax liability with refe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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