2015 (12) TMI 810 - AT - Service Tax

Penalty u/s 76 - improper availment of CENVAT Credit - Held that - Show-cause notice to the respondent, is not invoking any provisions for imposition of penalties on the assessee for improper availment of CENVAT Credit. Adjudicating authority was correct in not imposing any penalty as there being no invocation of any provisions of imposition of penalties for wrong availment of CENVAT Credit. In our considered view when revenue has not challenged the non-imposition of penalties under relevant provisions; the argument put forth by the learned DR for imposition of penalty under Cenvat Credit Rules, 2004 are unsustainable and are rejected out-right. - Decided against Revenue.

Summary

Issues:
Appeal against imposition of penalties under Section 76 of the Finance Act and improper availment of CENVAT Credit.

Analysis:
The appeals were filed by Revenue against the adjudicating authority's orders imposing penalties on the respondent under Section 76 of the Finance Act. The Revenue contended that penalties should have been imposed as per the provisions of Section 76, which prescribe a penalty of either Rs. 200 per day or 2% of the tax per month, whichever is higher. However, it was noted that in previous appeals before the Tribunal, the demands were set aside, and penalties imposed on the respondent were also overturned. Therefore, the argument for imposing penalties under Section 76 in the current case was deemed to have no merit and was rejected.

The Revenue also argued for the imposition of penalties on improper availment of CENVAT Credit by the respondent. However, it was found that the adjudicating authority had not imposed any penalty on this issue. Since there were no grounds of appeal regarding the non-imposition of penalties under the CENVAT Credit Rules, 2004, the argument for imposing penalties was considered unsustainable and rejected outright. The show-cause notice to the respondent did not invoke any provisions for penalties related to the improper availment of CENVAT Credit, further supporting the decision not to impose penalties.

In conclusion, the Tribunal rejected the appeals, considering that the demands had been set aside in previous cases, and there were no valid grounds for imposing penalties under Section 76 or the CENVAT Credit Rules, 2004. The decision was made after a thorough analysis of the arguments presented by the Revenue and the records of the case.