Tribunal partially overturns penalties, denies Cenvat Credit, orders repayment.

The tribunal partly allowed the appeal, setting aside the penalties imposed on the appellant and confirming the inadmissibility of the Cenvat Credit amount. The tribunal held that the appellant was not eligible for the differential Cenvat Credit of Rs. 21,522 and must repay it.

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Issues:
1. Eligibility of Cenvat credit on air ticket, and travel agency services.
2. Imposition of penalty of Rs. 59,328 under renting of immovable property.

Analysis:
Issue 1: The appellant availed Cenvat credit on air tickets, travelling expenses, and travel agency payments, claiming it as a business expense. The appellant argued that they were rightfully eligible for the credit. The Adjudicating Authority confirmed the demand of Rs. 21,522 for irregular Cenvat credit availed by the appellant. The Commissioner (Appeals) set aside the demand of Rs. 4,41,874 on supply of tangible goods service but confirmed the demand of Rs. 59,328 under renting of immovable property service. The appellant contended that they had already paid the entire amount with interest before the issuance of the Show Cause Notice, indicating no malafide intent. The tribunal observed that the appellant had reversed/paid a portion of the Cenvat Credit before the issuance of the notice, agreeing with the demands raised. Therefore, the tribunal held that the differential Cenvat Credit of Rs. 21,522 was inadmissible and recoverable from the appellant.

Issue 2: The tribunal referred to previous decisions regarding the penalty under renting of immovable property service. Citing the case of R.K. Refreshment & Enterprises (P) Ltd., the tribunal noted that the penalty could be waived under Section 80 if the tax liability was subject to disputes and amendments. The tribunal also referred to the case of Sree Kanyacombines, where penalties were set aside due to reasonable cause for failure to pay service tax on renting of immovable property. Applying these precedents, the tribunal set aside the penalty of Rs. 59,328 imposed on the appellant for renting of immovable property service.

In conclusion, the tribunal partly allowed the appeal, setting aside the penalties imposed on the appellant and confirming the inadmissibility of the Cenvat Credit amount.

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