2018 (2) TMI 1309 - AT - Central Excise

Consulting Engineer Service - reverse charge mechanism - non-payment of service tax for the period May 2008 to February 2009 - Held that - The Hon ble High Court of Karnataka in the case of Commissioner of Central Excise Vs. Adecco Flexione Workforce Solutions Ltd. 2011 (9) TMI 114 - KARNATAKA HIGH COURT has held that issue of SCN when entire amount along with interest stands paid is incorrect and bad in law - penalty set aside. CENVAT credit - it was alleged that CENVAT credit availed twice on the same Bill of Entry - Held that - The credit having not reversed and also having taken again for the second time points out that there is some adverted mistake on the part of the appellant - penalty upheld - however, benefit of reduced penalty of 25% granted. Non-payment of service tax under reverse charge mechanism for the period March 2009 to May 2009 - penalty - Held that - taking into consideration that there was only delay in discharging the liability of service tax, we are of the view that the penalty on this issue requires to be set aside - penalty set aside. Appeal allowed in part.

Summary

Issues Involved:
1. Non-payment of service tax under reverse charge mechanism for specific periods.
2. Wrong availing of CENVAT credit on inputs.
3. Delayed payment of service tax under reverse charge mechanism.

Analysis:

Issue 1 - Non-payment of service tax under reverse charge mechanism for specific periods:
The appellant had already paid the service tax and interest before the issuance of the show cause notice for this issue. The Tribunal held that no show cause notice should have been issued once the entire amount along with interest has been paid, citing the case law of Commissioner of Central Excise Vs. Adecco Flexione Workforce Solutions Ltd. The penalty imposed for this issue was set aside.

Issue 2 - Wrong availing of CENVAT credit on inputs:
The appellant had availed CENVAT credit twice on the same inputs due to an oversight. The Tribunal did not accept the explanation of oversight and found that the appellant's actions indicated a mistake. While the penalty was not set aside, the Tribunal upheld the original authority's decision to grant a reduced penalty of 25% of the tax paid.

Issue 3 - Delayed payment of service tax under reverse charge mechanism:
The appellant did not contest the service tax demand or interest for this issue. The Tribunal considered the delay in discharging the service tax liability and concluded that there was no intent to evade payment of duty. As a result, the penalty for this issue was set aside.

In conclusion, the Tribunal modified the impugned order by setting aside the penalty for the first and third issues. The appeal was partly allowed based on the above terms. Additionally, a miscellaneous application for a change of cause title was allowed.

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