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2010 (2) TMI 378 - AT - Service TaxCenvat Credit- this appeal against the impugned order whereby the credit of Rs. 1, 75, 113/- was denied on the ground that the same was availed on the strength of the register maintained by the appellant and penalty of equal amount was also imposed. The appellants working under the Cenvat credit scheme. Held that- in the show cause notice Provisions of Rule 15 of the Cenvat Credit Rules was invoked and as per sub-rule (3) of Rule 15 of rules if any person takes Cenvat credit in respect of the goods or in contravention of any Provisions of Rule such person shall be liable to penalty which may extend to an amount of Rs. 2, 000/-. In these circumstances as in the present case Cenvat credit in respect of the inputs and service was wrongly availed by the appellant the appellants are liable to penalty of Rs. 2, 000/- The penalty imposed in the impugned order is reduced to Rs. 2, 000/- only.
Issues:
1. Denial of Cenvat credit and imposition of penalty on the appellant for availing credit based on the register maintained without producing a valid duty paying document. Analysis: The appellant filed an appeal against the impugned order denying credit of Rs. 1,75,113/-, which was availed based on the register maintained by them. The Revenue contended that as per Rule 9 of Cenvat Credit Rules, a challan evidencing payment of service tax is necessary to avail credit. The appellant argued that as a recipient of DTA service, they paid the service tax and availed credit based on the debit entry in the statutory record. However, without a challan, verification of service tax payment was not possible. The Tribunal upheld the denial of credit due to the absence of a valid duty paying document. In terms of penalty, the appellant was found to have wrongly availed Cenvat credit for inputs and services. Rule 15 of the Cenvat Credit Rules stipulates a penalty of up to Rs. 2,000 for contravention of the Rules. As the appellant had contravened the Rules, a penalty of Rs. 2,000 was imposed. The Tribunal reduced the penalty to Rs. 2,000 in line with the Rules.
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