TMI Blog2008 (7) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... ngaged in the manufacturing, they were not entitled to treat GTA service as an output service - but as per Circular no. 341/18/04, no penalty should be imposed on such defaulters unless the default is on account of deliberate fraud - appeal is allowed only to the extent of setting aside the penalty - ST/127/2008 - 651/2008 - Dated:- 4-7-2008 - Shri P.C. Chacko, Member (Judicial) Final Ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice, for short) received by them. This credit was to the extent of Rs. 62,812/-. The department issued a show-cause notice to them proposing to recover the above amount with interest as also to impose penalty on them on the ground that input service tax was not available to be utilized for payment of service tax on GTA Service, which was also an input service'. The party contested the proposals b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... party. However, the present appeal contains certain grounds against the demand. None of these grounds has been found to be sustainable. The appellants are claiming under the aforesaid Explanation, which reads as follows: "Explanation:- For the removal of doubts, it is hereby clarified that if a person liable for paying service tax does not provide any taxable service or does not manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference to the reliance placed by the appellants on the amendment of Rule 2 (b) by the Finance Act, 2008, the Id. counsel submits that the appellants do not propose to press this ground. 4. The ld. counsel has also relied on the following decisions of the Tribunal: (1) Commissioner Vs. Nahar Industrial Enterprises Ltd., 2007 (80) RLT 482 (CESTAT-Del.) = 2007 (7) STR 26 (Tri.-Del.) ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of service tax with intent to evade payment of service tax". Ld. counsel has relied on the above circular in support of the appellants' prayer for vacating the penalty. Here, I have found a valid point. As the department has not alleged fraud, collusion etc. against the appellants, there need not be any penalty on them as per the circular. I suppose, the circular is binding on the other s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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