2018 (1) TMI 348 - AT - Central Excise

CENVAT credit - duty paying invoices - service tax availed on the strength of photostat copies - credit of service tax paid on invoices having addresses at various offices - service tax paid on outward transportation service - Held that - the learned Commissioner (Appeals) has held that in view of the fact that ER-1 and ST-3 returns were filed by the respondent regularly there was no case of any suppression and, therefore, the finding of Commissioner (Appeals) in respect of setting aside penalty imposed on the respondent under Rule 15 of Cenvat Credit Rules read with Section 11 AC of Central Excise Act, 1944 - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Admissibility of Cenvat Credit on various services.
2. Imposition of penalty under Section 11AC of Central Excise Act, 1944.
3. Acceptance of Cenvat Credit by the Commissioner (Appeals).
4. Contesting the dropping of equal penalty by the Commissioner (Appeals).

Analysis:
1. The appeal arose from a show cause notice issued to the respondent regarding the inadmissibility of Cenvat Credit amounting to specific sums for various services like construction, air travel, rent, photostat copies, and outward transportation. The Original Authority disallowed the credit and imposed a penalty. The Commissioner (Appeals) allowed some credits based on legal precedents and remanded some for further verification.

2. The Commissioner (Appeals) set aside the penalty imposed under Section 11AC of the Central Excise Act, 1944, citing the regular filing of ER-1 and ST-3 returns by the respondent as evidence of no suppression. The Revenue contested this decision, arguing for the penalty imposition.

3. The Revenue appealed against the dropping of the penalty and the acceptance of various Cenvat Credits by the Commissioner (Appeals). The grounds of appeal highlighted the disagreement with the Commissioner's decision on penalty and credit admissibility.

4. The learned AR representing the Revenue argued for the sustainability of the Original Order and the imposition of the penalty. On the other hand, the respondent's counsel did not contest the denial of certain credits but supported the Commissioner (Appeals) decisions on others, citing relevant High Court rulings.

5. After considering the arguments, the Tribunal upheld the Commissioner (Appeals) findings on the penalty, stating that since the respondent regularly filed returns, there was no suppression warranting a penalty. Consequently, the Tribunal dismissed the Revenue's appeal, affirming the sustainability of the Commissioner's decisions. The respondent was entitled to consequential relief as per law.

This detailed analysis of the judgment showcases the issues involved, the arguments presented by both parties, and the final decision rendered by the Tribunal, providing a comprehensive understanding of the legal proceedings and outcomes.