TaxTMI 
TaxTMI 
TaxTMI 
2015 (11) TMI 1348
X X X X Extracts X X X X
X X X X Extracts X X X X
....older of Service tax registration and are engaged in receipt of service of 'Authorized Service Station and Business Auxiliary Service'. He also carries trading of motor vehicle parts. The adjudicating authority in the order-in-original dropped the demand of Cenvat Credit of Rs. 33,691/- holding that this demand cannot be made under Rules 6(3)(b) of CCR, 2004, the appellant is not providing any exempted service; confirmed demand of Rs. 1,63,370/-and same was appropriated from the amount already deposited. This demand was on account of wrong availment of credit inasmuch as the appellant availed Cenvat Credit in respect of services for which invoice was received but the payment of service to the service provider was made subsequently. The dema....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g activity does not fall under the category of exempted service. He submits that Rule 6(3)(b) of Cenvat Credit Rules, 2004 can be made applicable only in respect of services which are exempted from payment of service tax. He further submits that on very same issue involved that whether trading activity is exempted service or otherwise was under dispute and subsequently vide Circular no . 9/43/4/2011/EX date 29/4/2011 the matter was clarified by the Board. Therefore there is no malafide intention of the appellant for non-payment of service tax of Rs. 33,619. It is his submission that demand was raised by invoking the extended period which is not sustainable. As malafide is not attributed to the appellant, the demand is not sustainable even o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y there was no dispute, whether said activity falls under the exempted goods or otherwise since the credit was used for non-taxable activity the demand under Rule 6(3)(b) is sustainable. As regard the time bar, Ld A.R. submits that the appellant has never disclosed fact that the input services were used for trading activity therefore is it clear case of suppression of facts, hence extended period was correctly invoked. Regarding demand of Rs. 1,63,370/- in respect of credit taken in advance before the payment of service value to the service provider, he submits that since the credit was admittedly inadmissible and same was paid by the appellant penalty under section 78 was correctly imposable. 4. I have carefully considered the submissions....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ppellant however, in principle, the credit was very much admissible to the appellant which the appellant on pointing out discrepancy, immediately paid the amount. Taking into consideration this fact the Ld. Original authority has not imposed penalty either under Section 76 or under Section 78 by extending the benefit provided under Section 80 of the Finance Act, 1994. I do not find any infirmity in the findings of the Ld. original adjudicating authority. The Ld. adjudicating authority has given justification in invoking Section 80 which extracted below:- Notice had availed Cenvat wrongly credit of Rs. 1,63,370/- in respect of the input service invoices before making payments to the service provider. In this connection, I observe that as p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ey availed said credit before making payment to the service provider, which they made good by making payment of service tax amount along with interest. Therefore, I am inclined to extend the benefit under Section 80 of the Finance Act, 1994 to the notice and restrain from imposing any penalty under Section 78 of the Finance Act, 1994 on the notice. Further, I observe that the penalty under section 76 of the Finance Act, 1994 is imposable only in cases where any person liable to pay service tax 68 fails to pay such tax. In this connection, I observe that the notice has not failed in payment of service tax in terms of Section 68 of the Finance Act, 1994 and hence, I hold that the penalty under Section 76 of the Finance Act, 1994 is not imposa....