2021 (4) TMI 683

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....case are that the appellant is a Kerala Government Undertaking engaged in the manufacture of G1/SG1 castings and windmill castings falling under TH No. 73259910 of CETA, 1985. Appellant has been importing raw-materials on which cenvat credit of Customs duty was paid. The records of the appellant were audited by the internal audit in 2013 and it was pointed out that the appellant had availed cenvat credit of basic Customs duty of Rs. 10,27,553/-(Rupees Ten Lakhs Twenty Seven Thousand Five Hundred and Fifty Three only) paid on imported inputs for which no cenvat credit is eligible. On the mistake being pointed out by the audit, the appellant paid the ineligible credit of Rs. 10,27,553/- (Rupees Ten Lakhs Twenty Seven Thousand Five Hundred and....

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....ayment of duty and the cenvat credit was inadvertently taken which was reversed before the issue of show-cause notice. He further submitted that in such circumstances imposition of penalty is not warranted by law and he relied upon the following decisions in support of his submissions: • Panasonic AVC Networks India Co. Ltd. Vs. CCE, Meerut-II - 2012 (280) E.L.T. 297 (Tri.-Del.) • Landis +Gyr Ltd. Vs. CCE, Kolkata-V - 2013 (290) E.L.T. 447 (Tri.-Kolkata) • Indo-Nippon Chemicals Co. Ltd. Vs. CCE, Vadodara - 2009 (233) E.L.T. 141 (Tri.-Ahmd.) • YCH Logistics (India) Pvt. Ltd. V. CCE, Cus. & ST, Bangalore-I 2020 (43) G.S.T.L 518 (Tri.-Bang.) • Pr. CCE, Bengaluru V. Vilax Industri....

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....how cause notice, then in that case show cause notice shall not be issued. In the present case, we find that the contention of the appellant that they bonafidely believed that they are not liable to pay service tax but when the audit party raised the objection that they are liable to pay service tax, then they immediately paid the service tax along with interest which is admitted in the impugned order, is justified. Further except mere allegation of suppression, the Department did not bring any material to prove that there was suppression and concealment of facts to evade payment of tax. Consequently, in our considered view, the imposition of penalty under Section 77 & 78 is not justified and bad in law. Hence, we set aside the penalty impo....