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2018 (9) TMI 392 - AT - Service TaxCENVAT Credit availed by mistake - revised return filed on being pointed out, rectifying the mistake - appellant also paid the entire amount of differential duty in January 2007 along with interest - Rule 7B of the Service Tax Rule, 1994 - Held that - No CENVAT Credit was availed in the month of October 2006, November 2006, December 2006, February 2007 and March 2007. Rule 7B of the Service Tax Rule, 1994 is designed to take care of such contingencies, the fact that the appellant were not availing Cenvat Credit is clear from the fact that no credit was availed in five month out of six covered in the Service Tax return - Since, appellant have filed revised return on 08.05.2007 that is within the period described under Rule 7B, it supersedes the original return filed by them. In these circumstances, no Cognizance needs to be taken of the first return filed by the appellant wherein, the Cenvat Credit was availed and utilised - appeal of M/s. Amardeep Construction is allowed. Penalty u/s 78 of FA - Held that - Since, demand and duty does not survive, the imposition of penalty cannot also survive - penalty set aside. Appeal allowed - decided in favor of assessee.
Issues:
Appeal against demand of duty and penalty under Section 78 of the Finance Act. Analysis: The appeal was filed by M/s Amardeep Construction and Revenue against the order of the Commissioner (Appeals) confirming the demand of duty but setting aside the penalty under Section 78 of the Finance Act. M/s Amardeep Construction argued that a clerical mistake led to availing Cenvat Credit in January 2007, which was rectified by filing a revised return within 30 days and paying the differential duty along with interest. The argument was supported by citing relevant Tribunal decisions. The Revenue contended that reversal of credit does not negate the fact that it was initially availed, and the appellant cannot benefit from the notification after availing Cenvat Credit. The Tribunal observed that no Cenvat Credit was availed in several months except for January 2007, which was claimed to be a clerical error. Rule 7B of the Service Tax Rule, 1994 was cited, providing an option to rectify such errors. The Tribunal noted that the appellant rectified the mistake by filing a revised return within the stipulated period under Rule 7B, which superseded the original return. Therefore, the Tribunal found merit in M/s Amardeep Construction's argument and allowed their appeal. Regarding the penalty under Section 78 of the Finance Act, since the demand and duty no longer stood following the decision on the appeal, the Tribunal dismissed the Revenue's appeal against the imposition of the penalty. The judgment was pronounced on 06.09.2018 by the Tribunal comprising HON’BLE MR. RAMESH NAIR, MEMBER (JUDICIAL) and HON’BLE MR. RAJU, MEMBER (TECHNICAL). The legal representatives for both parties were Shri. Paresh Sheth (Adv) for the Appellant and Shri. K.J.Kinariwala (AR) for the Respondent.
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