TaxTMI 
TaxTMI 
2019 (3) TMI 420
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....s a consignment agent and trader of products of M/s. Sun Pharmaceutical Industries and their group companies. The dispute is the availment of ineligible Cenvat Credit by the Appellant of Rs. 13,85,751/ - during the period from September, 2011 to February, 2012. According to the department, the discrepancy was discovered during the process of EA 2000 audit and it is an admitted fact that on being pointed out by the department, the appellant has paid the entire Service Tax amount of Rs. 13,85,751/ - with interest of Rs. 1,04,876/ - immediately. But despite that the department issued show cause notice to the appellant and the adjudicating authority confirmed the demand of service tax liability of Rs. 13,85,751/ - alongwith interest and penalty....
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....t payment of service tax occurred due to the inadvertence of the clerk who was filing the returns for the appellant during the disputed period and there has been no evidence of fraud or suppression. The ld. authorized representative appearing on behalf of revenue reiterated the findings recorded in the impugned order. He also submitted that the discrepancy would not have come to the light but for the detailed verification of the Cenvat register by Audit and that it cannot be considered as a bonafide mistake. The error is deliberate and intentional and, therefore, he prayed for dismissal of the appeal filed by the appellant. 4. Some undisputed facts of the matter are that the period in question is from September, 2011 to February, 2012. The....
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....e Hon'ble High Court of Judicature at Hyderabad in the matter of Commissioner of C.Ex., Visakhapatnam vs. Tirupathi Fuels Pvt. Ltd.; 2017(7) GSTL 142 (AP), wherein the Hon'ble High Court in a similar matter, where the assessee paid the service tax with interest before the issuance of show cause notice, set aside the penalty and held as under: - "15. We have already seen that the liability to pay penalty imposed under Section 78(1) arises only after the service of notice under the proviso to Section 73 (1). But, under sub - section (3) of Section 73, the Department cannot even issue a show cause notice, in cases where the Service Tax and interest has been paid, immediately upon the ascertainment of the Service Tax either on own assessment o....
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....in deleting the penalty. Therefore, the appeal is dismissed." 5. The Revenue has failed to bring any evidence to show that the appellant had in fact indulged into the activities of fraud, collusion, willful mis-statement, suppression etc. with intent to evade payment of service tax. On the contrary it is admitted fact that the service tax liability is not disputed by the Appellant and the same has been discharged with applicable interest, for delayed payment, much more before the initiation of proceedings. Mens rea has to be proved for invoking the extended period of limitation and also for imposing penalty under Section 78 of the Finance Act, 1994. Mere inaction to declare what was supposed to be declare d under the law does not lead to s....