2009 (5) TMI 112 - AT - Service Tax

Non-imposition of equivalent amount of penalty under Section 11AC - revenue submits that under Section 11AC equivalent amount of penalty is to be imposed on the respondents. The Commissioner (Appeals) in impugned order has reduced the penalty to Rs. 5, 000/- - Respondent has taken the Cenvat Credit on services claiming that they are incidental to the process of the manufacturing. From the records it is observed that there is no mens rea on the part of the respondent for taking Cenvat Credit. - Keeping in view the amount involved is also below Rs. 50, 000/- the appeal is rejected.

Summary

The Appellate Tribunal CESTAT, Mumbai heard an appeal by the Revenue for enhancement of penalty from Rs. 5,000 under Section 11AC of the Central Excise Act, 1944. The Commissioner (Appeals) had reduced the penalty to Rs. 5,000, but the Tribunal rejected the appeal as there was no mens rea on the part of the respondent for taking Cenvat Credit and the amount involved was below Rs. 50,000.