2013 (1) TMI 22 - AT - Service Tax

Cargo Handling Services - Customs House Agent Services - Steamer Agent Services - Short payment of Service Tax - Utilize credit in excess of the credit available - CENVAT credit wrongly utilised - Penalty u/s 76 - Penalty under Rule 15(3) of CCR - An amount equal to the irregularly availed credit was paid back in cash before the issue of SCN - Short-paid service tax was also paid after issue of SCN Assessee argued that they have paid the service tax short-paid and the credit irregularly utilized voluntarily even before confirmation of the demand by the original authority Held that - There was deliberate attempt in delaying payment of service tax by adopting questionable methods and that there was irregular utilization of credit has to be upheld. Under these circumstances, the imposition of penalties u/s 76 and Rule 15 (3) of the CENVAT Credit Rules are justified. In favour of revenue

Summary

Issues:
Appeal against Commissioner (Appeals) order dated 27.05.2009 regarding short-paid service tax, irregular credit utilization, penalty under Section 76 and Rule 15(3) of CENVAT Credit Rules.

Analysis:
The appellant, a transporter registered for taxable services, had short-paid service tax and irregularly utilized credit, leading to penalties imposed by the original authority and upheld by the Commissioner (Appeals). The appellant sought waiver of penalties, arguing that they voluntarily rectified the issues before confirmation of the demand. However, the tribunal found that the delay in payment and irregular credit utilization constituted deliberate attempts to evade tax obligations. Consequently, the penalties under Section 76 and Rule 15(3) of the CENVAT Credit Rules were deemed justified.

Conclusion:
The tribunal rejected the appeal, stating that there was no merit in the appellant's argument. The decision to uphold the penalties was based on the deliberate nature of the actions taken by the appellant in delaying service tax payments and irregularly utilizing credit.