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TMI Blog2015 (11) TMI 1348X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant on pointing out discrepancy, immediately paid the amount. There was no malafide intention to evade the service tax by the notice and their only lapse was that they availed said credit before the payment of service value to the service provider, which they made goods by making payment of service tax amount along with interest. I find that explanation given by the original authority is satisfactory in invoking Section 80 for dropping the penalty proposed under Section 78. Therefore the Ld. Commissioner’s observations in the impugned order that there is no justification are erroneous and incorrect. In view of this, I set aside the penalty - Decided partly in favour of assessee. - APPEAL NO. ST/490/12-MUM - - - Dated:- 23-1-2015 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e insurance policies to their customers after deliver/sale of the vehicle. Interest on the confirmed demand was also demanded penalty of ₹ 32,159/- was imposed under Section 78. Aggrieved partly by the said order, the Revenue filed an appeal before the Commissioner(Appeals), wherein the Revenue sought to confirm the demand of ₹ 33,619/- equal to 8% of the value of exempted service as provided under Rule 6(3), CCR, 2004 along with interest liability and penalty and also sought to imposed penalty under Section 76 or 78 for wrong availment of Cenvat Credit of ₹ 1,63,317/- . The Ld. Commissioner(Appeals) in the Revenue s appeal confirmed the demand of ₹ 33,619/- alongwith interest under Section 75 however did not impose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted only due to the reason that credit was availed on the date of receipt of service invoice whereas in terms of Rule 4(7) credit is admissible only after payment of service value made to the service provider. It is his submission that this is not the case where Cenvat Credit was at all inadmissible, however the credit was availed few days in advance from the date of payment of service value. The appellant has admittedly paid interest for the period from the date of credit taken till the date when service value was paid to the service provider, however the admissibility of the Cenvat Credit was not in dispute otherwise. Therefore under this circumstances lower adjudicating authority has correctly refrained from imposing any penalty under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Rule 6(3)(b) equal to 8% value of the trading activity in terms of Rules 6(3)(b) is correct or otherwise and whether penalty of ₹ 1,63,370/-imposed under Section 78 in respect of denial of Cenvat Credit availed before the payment of Service value to the service provider is legal and correct or not. As regard Cenvat Credit of ₹ 33,619/-, it admitted fact that this demand amount is related to trading activity of the appellant. As per definition of input Service, credit of only those services are admissible, which are used for providing of output service on which service tax is paid. In the present case this credit is related to the service which is used in relation to the trading activity of the appellant. As regard time ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t service on after payment of the value of input service and the service tax indicated in the invoice/challan/bill as referred in Rule 9 of the Cenvat Credit Rules, 2004. Therefore, I hold that the notice, by availing aforesaid Cenvat Credit ₹ 1,63,370/-, has violated the provisions of Rule 4(7) fo the Cenvat Credit Rules, 2004 and the amount of ₹ 1,63,370/- so wrongly availed by them is liable to be recovered form them under the provisions of Section 73 of the Finance Act, 1944. Further, I observe that the notice has suppressed the facts of availment of Cenvat credit before the payment to the service provider, from the department and these facts came to surface only when the Audit Officers of the Central Excise and Service tax, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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