2017 (2) TMI 845

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.... 2. Heard both sides and perused the records. 3. On perusal of records it is noticed that the respondent herein availed CENVAT credit of various capital goods in respect of popcorn machines, popcorn warming and display units to entertain people in the premises outside the multiplexes. They are eligible to avail CENVAT credit of duty paid on such machines as they were rendering taxable output services like renting of immovable property, business support services, storage & warehousing, Business Auxiliary Services etc. Respondent had availed CENVAT credit on the popcorn machines which were displayed and used by the persons who have leased the premises outside the multiplexes. During the course of audit it was pointed out that respondent h....

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....reversed the CENVAT credit availed on popcorn machines under the instructions from the audit party wherein it was indicated to them such credit was not eligible. Having discharged CENVAT credit and the interest therein, we find that the respondent cannot be further saddled with penalty as sought by Revenue in this appeal for a simple reason that respondent could have entertained bonafide belief that popcorn making machines and other machines which were used by various persons outside multiplexes. It is also undisputed that the respondent was discharging service tax liability under the category of "renting of immoveable property". In our view, the respondent could have entertained a bonafide belief that credit of Central Excise duty paid by ....