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2022 (4) TMI 473 - AT - Central ExciseLevy of penalty under Rule 15 of Cenvat Credit Rules, 2004 - CENVAT Credit - input services - transporting Furnace Oil to the plant for generation of electricity for supplying to the residential colony - credit denied on the ground that it was not used for manufacture of the excisable goods - HELD THAT - Since the issue is only about the penalty of ₹ 1,41,541/- imposed on appellants for wrongly availing Cenvat credit on input services therefore, other details of the matter, are not perused. This Tribunal also in the matter of M/S ULTRATECH CEMENT LTD. VERSUS C.C.E. S.T. BHAVNAGAR 2018 (6) TMI 1138 - CESTAT AHMEDABAD where it was held that Appellants are not eligible to the credit on Naphtha used for generation of electricity wheeled outside the factory and due to conflicting views on the issue, imposition of penalty is uncalled for. In view of the peculiar facts of this case no penalty is imposable on the appellants for wrongly availing Cenvat credit on input services - Appeal allowed - decided in favor of appellant.
Issues involved:
Penalty under Rule 15 of Cenvat Credit Rules, 2004 on the Appellant for taking cenvat credit on service tax paid on 'input services' for transporting Furnace Oil to the plant for electricity generation for supplying to the residential colony. Analysis: The issue in this appeal revolves around the penalty imposed on the Appellant under Rule 15 of Cenvat Credit Rules, 2004 for availing cenvat credit on service tax paid on 'input services' used for transporting Furnace Oil to generate electricity for supplying to the residential colony. The department denied the credit as it was not used for manufacturing excisable goods. The Appellant, engaged in cement manufacturing, availed Cenvat credit on inputs and input services, including for electricity generation using furnace oil. A show cause notice demanded reversal of Cenvat credit on inputs and input services used for electricity supplied to the colony. The Adjudicating Authority set aside the penalty on inputs but imposed a penalty for availing credit on input services, even though it was reversed before the Order-in-Original. The Commissioner upheld this decision, leading to the current appeal. The Appellant's Chartered Accountant argued that due to multiple amendments in the legal provision and conflicting views, imposing a penalty is unwarranted. Citing the Maruti Suzuki Ltd. case, the Appellant contended that penalties should not be levied due to legal uncertainties. In contrast, the Revenue's Authorized Representative argued that the Appellant wrongfully availed the credit, justifying the penalty. After considering the arguments and case records, the Tribunal focused solely on the penalty imposed for availing Cenvat credit on input services, referencing a previous decision involving Ultratech Cement Ltd. The Tribunal cited the Maruti Suzuki case, emphasizing that penalties should not be imposed due to conflicting legal interpretations. Consequently, the Tribunal set aside the penalty, aligning with the legal principles established by the Supreme Court. In conclusion, the Tribunal, following the legal precedent set by the Supreme Court and previous decisions, ruled that no penalty should be imposed on the Appellant for wrongly availing Cenvat credit on input services. The appeal was allowed to that extent, emphasizing the importance of legal clarity and consistency in tax matters.
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