2009 (7) TMI 1085

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....x registration, has been providing 'banking & other financial services' which includes the taxable and non-taxable services and the appellant has not been maintaining separate accounts for consumption of input service meant for taxable as well as non taxable service; that the appellant was served with a SCN dated 8-1-2007 alleging that the appellant availed 100% cenvat credit under rule 6(5) of the Cenvat Credit Rules, 2004, instead of restricting to 20% credit and accordingly, the appellant was directed to show cause as to why the Service tax of Rs. 52,218/- availed during the period from April, 2006 to September, 2006 should not be recovered under section 73 of the Finance Act, 1994 (hereinafter referred as the Act), interest should not b....

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....and 78 and also the interest under section 75 of the Act; (v) that the appellant is not liable to pay penalty under Section 78 as per new proviso to section 78 inserted by the Finance Act, 2008 with effect from 10-5-2008 and if penalty is payable under section 78, then the provisions of Section 76 shall not apply; (vi) that without prejudice to the above, the appellant submitted that no penalty is imposable in view of Section 80 of the Finance Act, since the appellant has proved beyond any shade of doubt that the respondent has erred in not taking the right interpretation of Rule 6(5) of the Cenvat Credit Rules. 3. PH was held on 7-7-2009 at 02.30 PM. Shri Sunil Datt Vyas, F.C.A. duly authorized by the appellant company appeared be....

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....ms of Rule 6 (3). The input service involved in the present appeal is 'maintenance & repair service'. In terms of the Rule 6(5) the appellant has availed credit of whole of Service tax paid on the taxable services specified in sub-clause (zzg) of clause (105) of section 65 of the Act. The department slapped the appellant with a SCN alleging that he is not entitled to utilize 100% credit, instead he is entitled only 20% of the credit in terms of rule 6(3)(c). By holding so, the lower authority has not only confirmed the Service tax along with interest, but also imposed equal penalty under Section 78 and another penalty under Section 76 of the Act for late payment. For confirming the Service tax, the Assistant Commissioner has come to the con....