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TMI Blog2024 (10) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by the Commissioner of Central Tax (Appeals-II), Anna Nagar, Chennai who have imposed a penalty of Rs.63,58,370/- under Rule 15 of CENVAT Credit Rules, 2004 read with Section 78 of the Finance Act, 1994 apart from appropriating the service tax and interest paid. 2.1 Briefly stated the facts are that the Appellant (previously known as M/s. Amco India Construction Private Limited) are engaged in the provision of Commercial or Industrial Construction Service, Architect Service and Consulting Engineering Service. The Appellants have availed CENVAT credit on the service tax paid by them on import of services under reverse charge basis before the actual payment of the service tax and also utilised the same for the monthly payment of taxes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty under Rule 15(4) of CCR, 2004 read with Section 78 of the Finance Act, 1994. After due process of the law, the Show Cause Notice was adjudicated by the Additional Commissioner vide his Order-in-Original No. 43/2017 dated 27.02.2017 confirming the service tax demanded along with interest and also imposed a penalty of Rs.63,58,370/- as above under Rule 15(4) of CENVAT Credit Rules, 2004 read with Section 78 of the Finance Act, 1994. On an appeal being filed by the Appellant, the Lower Adjudicating Authority confirmed the recovery of tax and interest and imposition of penalty. Being aggrieved, the Appellant came before this forum. 3.1 The Ld. Advocate Shri S. Durairaj representing the Appellant has submitted that the service tax was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d is under obligation to follow the provisions of the law and procedures prescribed in utilization of CENVAT credit for invoking larger period of limitation. 4. The Ld. Authorised Representative Smt. O.M. Reena has reiterated the findings of the Lower Appellate Authority vide order dated 18.01.2018 and has submitted that the appellant is required to pay the penalty as irregularity was noticed only on conducting of the audit of Appellant's records by CERA. The applicable interest was paid only subsequent to Audit objection and not before and so, the Appellant has clearly contravened the provisions of the CENVAT Credit Rules, 2004 and also the Finance Act, 1994 attracting penal action. 5. Heard both sides and considered the submissions and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition of mandatory penalty in terms of Section 73 of the Finance Act, 1994 which reads as under : - " (3) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person chargeable with the service tax, or the person to whom such tax refund has erroneously been made, may pay the amount of such service tax, chargeable or erroneously refunded, on the basis of his own ascertainment thereof, or on the basis of tax ascertained by a Central Excise Officer before service of notice on him under sub-section (1) in respect of such service tax, and inform the Central Excise Officer of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeal and set aside the penalties." 10. In this appeal, even there is no allegation that the Appellant has taken the CENVAT credit without payment of the service tax on reverse charge basis. There was only few days' delay and the assessee has availed the service tax paid on reverse charge basis even before its payment. There is no allegation of fraud or suppression and the Appellant have paid the interest for prior utilisation of the CENVAT credit and interest was paid before the issuance of the Show Cause Notice on being pointed by the Audit. 11. Appreciating the decisions in the above cases, the mandatory penalty imposed invoking the extended period under Rule 15(4) of CENVAT Credit Rules, 2004 read with Section 78 of the Finance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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