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TMI Blog2015 (11) TMI 876X X X X Extracts X X X X X X X X Extracts X X X X ..... y should not have utilized the CENVAT Credit on the inputs services which were used for providing non-taxable output services. Accordingly, appeal was rejected. 2. Facts as given in above order are extracted to examine the issue. M/s. Indian Visit Pvt. Ltd were providing services under the taxable category of 'Tour Operator Services' and were registered with Services Tax Department. It was noticed that the appellants had wrongly availed Cenvat Credit of Rs. 63,202/- in as much as the fact that they were though maintaining separate records, yet the said credit was utilized in providing output services against which no service tax was paid. It was alleged that the services so provided were exempted services and that in a scenario where both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cleared for export, or used in providing output service which is exported, the CENVAT credit in respect of the input or input service so used shall be allowed to be utilized by the manufacturer or provider of output service towards payment of, 4. Ld. Counsel claimed that it was interpretational issue and no penalty was imposable as no malafide has been manifested. He further contended that they were under the bonafide belief and accordingly utilized the credit. 5. On the other hand, ld. DR during hearing of the appeal followed by his written submissions dated 30/10/2004 contended that assessee vide their letter dated 26.07.2012 have accepted that they have utilized Cenvat Credit on certain services such as Chartered Accountant Service wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w could be taken for not imposing penalty. I find that there is no doubt that once output services are provided free of service tax and separate records are maintained, it is imperative that no credit could be utilized for providing non-taxable services. It is also stipulated that if violation of legal provisions is manifested by not restricting the credit utilization to 20 per cent of the credit, then imposition of penalty is attracted. 9. In view of above, I find that Adjudicating Authority has rightly imposed the penalty of Rs. 100 per day till the payment of service tax under section 76 of the Finance Act restricting the total amount of penalty equivalent to the amount of service tax involved. 10. I do not find any force in the submis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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