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2023 (3) TMI 694 - AT - Service TaxMaintainability of appeal - appeal dismissed for failure to comply with Section 35F (pre-deposit) - simultaneously imposition of penalty under Section 76, 77 78 which the Commissioner (Appeals) allowed - service tax alongwith interest was paid on being pointed out - HELD THAT - It is seen that payment of Service Tax on reverse charge mechanism using CENVAT is a valid payment. The impugned order has failed to consider merit for the appellant s case and dismissed only for noncompliance of Section 35F. In this circumstances, the impugned order does not dealt with the entire defense of the appellant. The said order is also set aside and matter remanded to the Commissioner (Appeals) for fresh adjudication. Appeal allowed by way of remand.
Issues: Appeal against demand of Service Tax, imposition of penalty u/s 76, 77 & 78 of the Finance Act, 1994.
Summary: The appeal was filed against the demand of Service Tax and penalties imposed under Section 76, 77 & 78 of the Finance Act, 1994 by M/s. Vardhaman Stamping Pvt Ltd. The appellant availed the services of a Foreign commission agent for the sale of goods abroad but failed to pay the service tax on Reverse Charge Mechanism initially. Upon notification by Revenue, they paid the amount along with interest. Subsequently, the Revenue issued a Show Cause Notice (SCN) confirming the demand and penalties under Section 77 & 78. The appeal was dismissed for failure to comply with Section 35F as the payment made using CENVAT credit was not recognized. The Commissioner (Appeals) also allowed the imposition of penalties under Section 76, 77 & 78. The appellant argued that the law permits the utilization of CENVAT credit to pay Service Tax on a reverse charge basis citing relevant case laws. The AR relied on a decision asserting that Service Tax is leviable on a Reverse Charge Basis. In the case analysis, it was observed that payment of Service Tax on a reverse charge mechanism using CENVAT credit is a valid payment method. The impugned order was found to have failed to consider the merit of the appellant's case and was dismissed solely for noncompliance with Section 35F. Consequently, the order was set aside, and the matter was remanded to the Commissioner (Appeals) for fresh adjudication.
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