TaxTMI 
TaxTMI 
2015 (12) TMI 490
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.... Notification No.2/2006-ST, dt.01.03.2006. A Show Cause Notice dt.22.10.2007 was issued, proposing to deny the benefit of abatement on the ground that they had also availed the benefit of CENVAT Credit and therefore, there is a demand of Service Tax of Rs. 9,58,749.00 alongwith interest and to impose penalty. The Appellants submitted before the Adjudicating authority that by mistake of law, they availed CENVAT Credit of Rs. 22,981.00 which was reversed by them after detection. 2. The Adjudicating authority dropped the proceedings initiated in the Show Cause Notice dt.22.10.2007. In revision proceedings under Section 84 of Finance Act, 1994, by the impugned order, the Commissioner, Vadodara II set aside the Adjudication order passed by the ....
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.... Bharuch has contravened the provisions of Section 68 and 70 of Finance Act, 1994 and Rule 6 and Rule 7 of Service Tax Rules, 1994 without any prima facie intention to evade payment of Service Tax. Further, they had contravened the provisions of Notification No.1/2006-ST, dt.01.03.2006 inasmuch as they had wrongly availed the CENVAT Credit of Service Tax paid in respect of input services. But once they came to know the mistake, they have reversed the CENVAT Credit taken on input services alongwith interest. As the Service Tax is a new levy and there being no prima facie malafide intention on the part of the assessee, it appears that it would be improper to deny the benefit of abatement as provided under Notification No.1/2006-ST, dt.01.03....
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....cturer had availed the credit at the time of clearance of the goods and had suo-motu reversed/availed exemption later on almost after 15 months when it claimed refund of MODVAT Credit. In the case of Eagle Flask, it was held that for availing the benefit under notification, the conditions have to be strictly complied with and therefore exemption from operation of Rule 174 (rule requires declaration to be filed) was not available to the appellant. On the other hand, in the case of Chandrapur Magnet Wires Pvt.Ltd. (Supra), it was held in Para 7 as under: 7. In view of the aforesaid clarification by the Department, we see no reason why the assessee cannot make a debit entry in the credit account before removal of the exempted final product. ....