2019 (1) TMI 252

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.... of appellant the Department observed that the appellant is engaged in providing taxable as well as exempted services but has availed cenvat credit of common input services without maintaining a separate account for input services credit for exempted as well as taxable services during the period 2013-14. It was alleged that the appellants in their ST-3 Returns also have not disclosed the correct taxable value and have not paid service tax amounting to Rs. 42,65,412/- i.e. equivalent to 6% on the value of the exempted services. Resultantly, a Show Cause Notice No. 654 dated 23.03.2015 was served upon the appellant proposing the recovery of the aforesaid amount alongwith the interest at the appropriate rate and the proportionate penalties. Th....

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....this Appeal is as to whether penalty can be imposed when the amount of cenvat credit availed has been reversed alongwith the interest even before the issuance of the Show Cause Notice. No doubt the appellant herein was engaged in manufacture of dutiable as well as exempted final products. In accordance of Rule 6(2) of Cenvat Credit Rules, the appellant was supposed to maintain the separate accounts for inputs for manufacture of dutiable as well as exempted (trading) final products. However, in case of not so maintaining, the appellant has two options: Either to take the cenvat credit and pay amount equal to 6% of value of exempted goods (w.e.f. 01.04.2012) as per Rule 6(3)(i) CCR, 2004 Or to take entire credit and pay an amount equal ....