2011 (2) TMI 838 - AT - Service Tax

Penalty - Business auxiliary service- credit had been taken twice by the appellant on the same invoice - Rule 15(3) of Cenvat Credit Rules - The appellants submitted that appellant had not taken any excess credit at all - held that - Three levels namely at the level of scrutiny of ST-3 return and issue of show cause notice, at the time of adjudication and at the time of hearing of the appeals, no one had fifteen minutes of time to consider and avoid proceedings at three levels - issue does not need any more verification/consideration and learned DR also agrees that assessee is not liable to pay the credit. - Decided in favor of assessee.

Summary

Issues involved:
Demand of service tax, imposition of penalties under Section 76 and Section 78 of Finance Act, 1994, penalty under Rule 15(3) of Cenvat Credit Rules, clerical error in cenvat credit availed, rectification during ST-3 return filing, failure at multiple levels to consider facts.

Analysis:
The judgment revolves around the appellant, engaged in providing business auxiliary service, facing a demand of Rs.8,670 for allegedly taking credit twice on the same invoice. Penalties under Section 76 and Section 78 of Finance Act, 1994, and a penalty under Rule 15(3) of Cenvat Credit Rules were imposed. The appellant contended that no excess credit was taken, citing a clerical error in the annexure to the service tax. The appellant highlighted discrepancies in the ST-3 return, clarifying that the difference in payment amounts was due to a data entry mistake. The tribunal verified the records and acknowledged the error, noting that no excess credit was availed, and the service tax was paid correctly. Both the appellant and the learned DR agreed on this position.

The tribunal found that the original adjudicating authority and the Commissioner (Appeals) had overlooked the fact that no credit was taken for the relevant invoice and confirmed the demand erroneously. The tribunal emphasized that the issue was a clerical error, rectified during the filing of the ST-3 return. It criticized the lack of attention to detail at various stages of scrutiny, adjudication, and appeals, noting that the matter could have been resolved with a mere fifteen minutes of consideration. The tribunal, after thorough verification, concluded that no further verification was necessary, and the appellant was not liable to pay the credit. Consequently, the stay petition was allowed unconditionally, and the impugned order was set aside entirely, providing consequential relief to the appellants. The tribunal highlighted the importance of attention to detail and timely consideration to avoid unnecessary proceedings.

In summary, the judgment addressed the demand of service tax, penalties imposed, a clerical error in cenvat credit availed by the appellant, rectification during ST-3 return filing, and the failure at multiple levels to consider crucial facts. The tribunal's detailed analysis emphasized the need for meticulous scrutiny and timely resolution of discrepancies to prevent unwarranted legal actions.