TaxTMI 
TaxTMI 
2026 (7) TMI 1355
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....n 77 of the Finance Act 1994 and a penalty of Rs.5,000/- under Rule 15 A of the Cenvat Credit Rules. 2. At the material time the appellant had a manufacturing unit at Thuraipakkam, Perungudi, Chrompet, Gummidipoondi Hosur and set up a new manufacturing unit at Appur Village of Kancheepuram District. The appellant had availed cenvat credit on capital goods and input services. In respect of certain services received by their corporate office at Chennai, the service tax credit relating to such services was distributed to various units, as an input service distributor. In the year 2008-09, during the course of audit of the records of the appellant's head office, it was noticed that the appellant had availed certain credits in respect of ....
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....4,89,473/- (Rs.4,17,165/- plus Rs.72,308/-) and confirmed equal penalty to the tune of Rs.4,17,165/- on the appellant. Certain penalties invoked under section 77 (Rs.4,17,165/-) and under section 78 (Rs.72,308/-), as imposed by the lower authority were however set aside. 5. Aggrieved thereby the appellant is in appeal before this Tribunal. 6. I have heard the appellant and perused the case records. The learned AR has also made submissions supporting the impugned order. 7. It is the case of the appellant that for an amount of Rs. 4,89,473/- paid as consultation fee or commission to the foreign consultant, the same was recorded in the balance sheet, wherefrom the departmental authorities had culled out the said figure. It is therefor....
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....undertaken to pay interest shortfall as may be due in the matter. In the circumstances, the imposition of penalties on the appellant either under to Rule 15 of the CCR Rules or under Section 77 and 78 are not called for. Also any penalty imposition would not hold good, moreso penalty equivalent to the amount afforested for a time-barred demand is clearly not sustainable under Section 78. 10. There are a series of cases where demands based on audit objections pursuant to verification of financial records and balance sheet can at best invite demand for duty, only for the normal limitation period. Some of these case laws are as under: i. Blackstone polymers vs CCE, Jaipur -II (2014-301-ELT-657TRI.Del) ii. Sri Rama Multi Te....
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....ld come to the aid of the appellant to hold them as not liable to penal charges. 13. It is also on record that there has been no abuse of the Cenvat credit allowed on the goods. The revenue is also not pressing for sustaining the penalty of Rs.5,000/- imposed under Rule 15 of the Cenvat credit rules. I therefore am of the view that this penalty also needs to be set aside. As the subject matter of imposition of penalty under Section 77 indeed has been an interpretational issue at the material point of time, the imposition of penalty under Section 77 is also uncalled for and needs to be set aside. 14. In view of the aforesaid discussions and settled case laws, penalties as imposed by the learned Commissioner (Appeals) under Rule 15 of t....