Tribunal Overturns Penalty, Allows High Speed Diesel Credit for Garden Maintenance Service

The tribunal set aside the penalty on the High Speed Diesel (HSD) credit due to inadvertent error and allowed the credit for garden maintenance service, following a High Court ruling. The appellant's compliance with Pollution Control Board norms and reference to a related company's case supported the decision to grant relief as per law.

---

---

Issues:
1. Availment of ineligible input credit on High Speed Diesel (HSD).
2. Availment of credit on service tax paid for garden maintenance service.

Analysis:
1. The appellants availed CENVAT credit on HSD and service tax paid on input services. The department alleged that credit on two HSD invoices and garden maintenance service was ineligible. The original authority confirmed the demand but dropped interest and imposed a 50% penalty. The Commissioner (Appeals) upheld the decision. The appellant argued that the HSD credit was an inadvertent error, rectified promptly upon audit discovery. The tribunal noted the limited HSD invoices and presumed inadvertence, setting aside the penalty. The tribunal also referenced a High Court ruling to allow credit for garden maintenance service, overturning the disallowance.

2. The appellant contended that the HSD credit was due to inadvertent error, promptly rectified. The tribunal acknowledged the limited invoices and deemed the penalty unwarranted, setting it aside. Regarding the garden maintenance service credit, the appellant argued compliance with Pollution Control Board norms, citing a High Court decision allowing such credit for a related company. The tribunal, following the High Court precedent, overturned the disallowance, allowing the credit. The tribunal set aside the penalty on HSD and allowed the credit for garden maintenance service, granting relief to the appellant as per law.

---