TMI Blog2019 (1) TMI 1042X X X X Extracts X X X X X X X X Extracts X X X X ..... y. Penalty u/s 78 - Held that:- From the manner in which the adjudicating authority has arrived at its conclusions, we are unable to ascertain if the ingredients of section 78 are apparent in the matter of inadequacy of credit or in the failure to discharge service tax upon the rendering of the taxable service - The grounds of appeal appear to focus on the legality and propriety of the course of action adopted by appellant and in the plea for relief it is claimed that interpretation of rule 3(4) of CENVAT Credit Rules, 2004 erases the scope for invoking the provision - penalty not warranted. We set aside the impugned order to enable fresh adjudication. We also adjure the original authority to restrict the proceedings to the show cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ack of sufficient balance during the relevant months, proceedings were initiated by notice of 1st January 2014 for recovery of the tax, along with appropriate interest, and for imposition of penalty under section 78 of Finance Act, 1994. 3. The notice, and impugned order-in-original no. PUN-EXCUS- 001-COM-014-14-15 dated 9th July 2014 of Commissioner of Central Excise, Pune-I, have erred in their premise as Central Board of Excise Customs in circular no. 962/05/2012-CX8 dated 28th March 2012, has clarified that discharge of arrears through CENVAT credit mechanism is not barred by any legal provision. As retrospective debit is an impossibility, the circular, impliedly, permits consolidated debit of the arrears in the CENVAT credit accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thout disclosing intent to order recovery, based on the facts available at the time of issue. That which is beyond the competence of the original authority is not amenable to appellate jurisdiction on the merit of liability. 5. The next issue that arises is whether the appellant is liable to be imposed with penalty under section 78 of Finance Act, 1994. From the manner in which the adjudicating authority has arrived at its conclusions, we are unable to ascertain if the ingredients of section 78 are apparent in the matter of inadequacy of credit or in the failure to discharge service tax upon the rendering of the taxable service. The grounds of appeal appear to focus on the legality and propriety of the course of action adopted by appella ..... X X X X Extracts X X X X X X X X Extracts X X X X
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