2018 (10) TMI 542 - AT - Service Tax

Demand of Interest and penalty u/s 76 - short payment of service tax - intent to evade present or not - Held that - It was informed that assessee has not paid said tax liability and interest thereof. In the absence of any evidence to show that assessee had intention to pay the tax with interest which is short paid, the impugned order is correct in imposing penalty along with interest on the appellant - demand upheld. Penalty - Reversal of ineligible CENVAT credit availed - Held that - Appellant has availed ineligible CENVAT credit and should have reversed the same as soon as the adjudicating authority has passed the order but the same still remains to be paid despite the adjudication order passed by the authority in 2016 - the prayer for leniency on penalty imposed under this also does not hold any good. Appeal dismissed - decided against appellant.

Summary

Issues Involved:
1. Short payment of service tax liability during April 2010 to March 2011.
2. Penalty imposed under Sec.76.
3. Demand towards ineligible CENVAT credit availed by the appellant.

Short Payment of Service Tax Liability:
The appeal was against an Order-in-Original regarding a demand of &8377; 10,57,888 for short payment of service tax liability during April 2010 to March 2011. The adjudicating authority considered all aspects of the case and found that the appellant had indeed underpaid the tax liability. The appellant's argument to set aside the penalty imposed under Sec.76 was rejected as there was no evidence of an intention to pay the tax with interest. The impugned order confirming the demand was upheld based on the records and the appellant's failure to pay the outstanding tax liability and interest.

Penalty Imposed under Sec.76:
The appellant's counsel sought leniency in setting aside the penalty imposed under Sec.76. However, the Bench found that the appellant had not paid the tax liability and interest, indicating a lack of intention to rectify the underpaid amount. The impugned order was deemed correct in imposing the penalty along with interest due to the absence of evidence showing the appellant's willingness to pay the shortfall.

Demand Towards Ineligible CENVAT Credit:
Another issue was the demand towards ineligible CENVAT credit availed by the appellant. It was observed that the appellant had availed such credit but failed to reverse it despite the adjudication order passed in 2016. The argument for leniency on the penalty imposed in this regard was dismissed, and the impugned order confirming the demand of ineligible CENVAT credit was upheld, including interest and penalty.

Conclusion:
After considering the arguments and perusing the records, the Tribunal found no reason to interfere with the impugned order. Consequently, the appeal was rejected, affirming the demand for the short payment of service tax liability and the ineligible CENVAT credit availed by the appellant.