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Issues involved: Central Excise Appeal u/s 35G of Central Excise Act, 1944 regarding Cenvat credit disallowance and penalty imposition.
Summary: The Central Excise Appeal arose from a final order by the Customs, Excise & Service Tax Appellate Tribunal, which restricted the Cenvat credit to Rs. 17,982 only and did not find grounds for imposing a penalty exceeding that amount. The Tribunal noted that post-amendment in Section 78, penalties cannot be simultaneously imposed under Sections 76 and 78. The Order-in-Appeal was confirmed for service tax and an equal penalty under Section 78. A show cause notice was issued proposing that only Rs. 17,982 of Cenvat credit was admissible, with the remaining balance disallowed. The subsequent appeal dismissal was based on the authority exceeding the show cause notice by disallowing the entire Cenvat credit for maintenance and repair services specified under Rule 6(5) of Cenvat Credit Rules. The Tribunal determined that the appellants provided renting of immovable property services and maintenance/repair services for an area exceeding 998 sq. ft. Such services beyond 998 sq. ft. were not considered inputs services as they were not utilized for output services. However, Cenvat credit for service tax paid on maintenance services for 998 sq. ft. was deemed eligible, aligning with the original show cause notice proposal. The department's appeal questioned the CESTAT's failure to confirm the total demand of Service Tax, interest, and penalties due to the alleged ineligible service tax credit availed by the respondents. The Court found no merit in the stated question of law and determined that the appeal did not warrant consideration due to the insignificant amount involved and the absence of any legal issues for review. Ultimately, the Central Excise Appeal was dismissed by the Court.
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