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2023 (12) TMI 478 - AT - Service TaxNon imposition of penalty under Rule 15 (3) of Cenvat Credit Rules, 2004 - HELD THAT - From reading of the above Rule 15(3) it is clear that penalty under the aforesaid rule can be imposed only when the credit has been taken or utilized wrongly by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of these rules or of the Finance Act or of the rules made thereunder with intent to evade payment of service tax - In the facts of the present case all the show cause notices were issued on the same issue subsequent to the show cause notice related to the case which was decided by the Hon ble Gujarat High Court in the appellant s own case reported at MUNDRA PORTS AND SPECIAL ECONOMIC ZONE LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE CUSTOMS 2015 (5) TMI 663 - GUJARAT HIGH COURT . The Adjudicating Authority after discussion that since the department was aware of availing the cenvat credit by the respondent and the present show cause notices were issued subsequent to the first SCN therefore, there is no suppression of fact. Hence, the penal provision under Rule 15 (3) is not invokable - Considering the facts and circumstances of the present case, the Adjudicating Authority agreed upon, in as much as the penalty under Rule 15 (3) of CCR, 04 was not imposed. The penalty under Rule 15 (3) is not imposable not only for the reason the demand does not exist but also independently on its merit. Accordingly, the revenue s appeals are not maintainable hence the same are dismissed.
Issues involved:
The judgment involves the contestation of non-imposition of penalty under Rule 15(3) of Cenvat Credit Rules, 2004 against the confirmation of duty demand of cenvat credit availed on various services and goods. Imposition of Penalty - Revenue's Appeal: The Revenue appealed against the non-imposition of penalty under Rule 15(3) of Cenvat Credit Rules, 2004, alleging mala fide intention on the part of the respondent for continuously availing cenvat credit despite an initial order against them. The Revenue argued that the respondent was liable for penalty under Rule 15(3) due to this alleged intentional wrongdoing. Response to Penalty Imposition - Respondent's Defense: The Respondent contended that as per a Tribunal order, the demand had been set aside, rendering the basis for imposing penalty under Rule 15(3) unfounded. They argued that all show cause notices were issued within the normal period, indicating no suppression of facts. The Respondent further highlighted that subsequent show cause notices did not meet the criteria for imposing penalty under Rule 15(3) independently on merit. Judicial Consideration and Decision: The Tribunal carefully considered both sides' submissions and examined the records. It noted that since the demand for cenvat credit had been set aside, the proposal for imposing penalty under Rule 15(3) was no longer applicable. The Tribunal analyzed the relevant Rule 15(3) and concluded that the penalty could only be imposed in cases of fraud, collusion, willful misstatement, or suppression of facts, none of which were established in this case. The Tribunal aligned with the Adjudicating Authority's decision not to impose the penalty under Rule 15(3) and cited a Supreme Court judgment in support of this stance. Consequently, the Tribunal found that the penalty under Rule 15(3) was not imposable due to the non-existence of the demand and lack of merit independently. Final Decision: Based on the above analysis, the Tribunal ruled that the Revenue's appeals were not maintainable and subsequently dismissed them. The judgment was pronounced in open court on 23.08.2023.
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