2018 (11) TMI 976 – CESTAT HYDERABAD – TMI – Interest on CENVAT Credit reversed – case of appellant is that they have had not utilized the same – Held that:- The records as verified by the Commissioner put so other wise. The Learned Counsel for the appellant also agrees that the disputed amount had been utilized therefore interest is liable to be paid on the disputed amount.
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Penalty u/s 78 – Held that:- It is not in dispute that the appellant had wrongly availed CENVAT credit and utilized the same and thereby evaded payment of service tax and this was noticed only in audit records by the Departmental Officers therefore penalty is liable to be imposed under Section 78 – however, the quantum of penalty reduced to 50%.
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Appeal allowed in part. – Appeal No. ST/30844/2018 – A/31466/2018 – Dated:- 6-11-2018 – Mr. P. Venkata Subba Rao, Member (Technical) Shri Y. Sreenivasa Reddy, Advocate for the Appellant. Shri V.R. Pavan Kumar, Superintendent (AR) for the Respondent. ORDER Per:
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of CENVAT credit and had reversed the same along with interest except to the extent of the above two credits of ₹ 42,750/- and ₹ 4,452/-. The lower authority in this Order-in- Original discussed the facts in detail and ordered recovery of these two amounts along with appropriate interest and imposed a penalty equal to these two amounts under Section 78 of Finance Act, 1994 for irregular availment of CENVAT credit with intent to evaded payment of tax. Aggrieved, the appellant preferred an appeal before the First Appellate Authority who dismissed their appeals and upheld the Orderin- Original of the lower authority. Hence this appeal. 4. Learned Counsel for the appellant submits that the appellant was a small time operator without adequate knowledge of the service tax procedures and CENVAT Credit Rules and therefore had taken CENVAT credit wrongly on several inputs including the two amounts in dispute. On being pointed he had reversed the amounts along with interest except th
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as applicable during the relevant period only 50% of the service tax amount is liable to be imposed as a penalty and they may be given the benefit of this proviso. 5. Learned Departmental Representative agrees with the facts of the case narrated by the Learned Counsel and produces before the Bench a letter from the Office of the Commissioner of Central Tax, CGST Commissionerate, Guntur confirming that they had verified the records of the appellant the wrongly availed the CENVAT credit of ₹ 42,750/- and ₹ 4,452/- had been utilized by the assessee for payment of tax liabilities during the period and they had not maintained any credit balance equivalent to the irregular credit taken during the period in dispute. In fact, the assessee had shown zero closing balance of service tax in their ST-3 returns. He, therefore, submits that the appellant was liable to pay interest as they had wrongly utilized the CENVAT credit. He further argues that in so far as these two amounts were c
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amount. Insofar as the penalty under Section 78 is concerned, it is not in dispute that the appellant had wrongly availed CENVAT credit and utilized the same and thereby evaded payment of service tax and this was noticed only in audit records by the Departmental Officers therefore penalty is liable to be imposed under Section 78. However as these facts came into light only during the records already maintained by the appellant by in their books of accounts proviso of Section 78 as applicable during the relevant period applies in its full force and the penalty is liable to be reduced to 50% of the disputed amount. 7. The impugned order is modified to the extent of the reducing the penalty under Section 78 to 50% of the duty evaded. The appeal is disposed of as herein above. (Operative portion of this order was pronounced in open court on conclusion of hearing) – Case laws – Decisions – Judgements – Orders – Tax Management India – taxmanagementindia – taxmanagement – taxmanagementindia
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