2022 (3) TMI 48 - AT - Service Tax

Levy of penalty under Rule 15(4) of Cenvat Credit Rules, 2004 or Rule 15(2) of CCR - suppression of fact or an apparent error - HELD THAT - There is suppression of fact on the part of the assessee. Therefore, the correct rule for penalty to be invoked is Rule 15(4) of Cenvat Credit Rules, 2004 and not Rule 15(2). However, whether there is suppression of fact or otherwise the matter in the assessee s case M/S FASCEL LIMITED (PRESENTLY KNOWN AS VODAFONE ESSAR GUJARAT LIMITED) , BHARAT SANCHAR NIGAM LIMITED, VODAFONE ESSAR GUJARAT LIMITED, BHARAT SANCHAR NIGAM LIMITED CMTS AHMEDABAD VERSUS C.S.T., AHMEDABAD 2017 (1) TMI 1283 - CESTAT AHMEDABAD has been remanded to the Adjudicating Authority. Therefore, this matter also needs to be remanded to the Adjudicating Authority. Appeal is disposed of by way of remand to the Adjudicating Authority.

Summary

Issues: Department's appeal against imposition of penalty under Rule 15(4) of Cenvat Credit Rules, 2004 due to confirmed suppression of fact by the Adjudicating Authority.

Analysis:
1. Imposition of Penalty: The department's appeal was based on the contention that the Adjudicating Authority had confirmed the suppression of fact by the respondent, warranting the imposition of penalty under Rule 15(4) of the Cenvat Credit Rules, 2004. The department argued that despite mentioning Rule 15(2) in the impugned order, the correct penalty provision should have been Rule 15(4, which mandates the imposition of an equal amount of service tax as penalty in case of suppression of fact. The Learned Additional Commissioner emphasized that the Adjudicating Authority's failure to impose the penalty under the correct rule was an error, and the wrong rule number mentioned should not absolve the assessee from the legally imposable penalty under Rule 15(4). Several judgments were cited in support of this argument.

2. Remand for Further Consideration: The Tribunal, after considering the submissions and perusing the record, agreed with the department's contention regarding the invocation of Rule 15(4 for penalty in case of suppression of fact. However, it noted that a similar issue regarding suppression of fact was remanded in another appeal. Consequently, the Tribunal decided to remand the present appeal back to the Adjudicating Authority for a decision on the penalty, aligning it with the earlier remand matter. The appeal was disposed of by way of remand to the Adjudicating Authority for further consideration and decision on the penalty issue.

3. Non-appearance of Respondent: Despite due notice, no one appeared on behalf of the respondent during the proceedings, which may have influenced the Tribunal's decision to remand the matter for a fresh consideration by the Adjudicating Authority.

In conclusion, the Tribunal's judgment focused on the correct application of penalty provisions under the Cenvat Credit Rules, 2004 in cases of suppression of fact, highlighting the need for adherence to the appropriate legal provisions and ensuring a fair and thorough consideration of the issues involved.