CESTAT, AHMEDABAD BENCH
Commissioner of Central Excise, Surat
ORDER NOS. A/1378/WZB/AHD. OF 2012 & S/1962/WZB/AHD. OF 2012
APPLICATION NO. E/S/834 OF 2012†
APPEAL NO. E/546 OF 2012
SEPTEMBER 7, 2012
1. This Stay Petition is filed for waiver of pre-deposit of an amount of CENVAT Credit sought to be reversed by the Revenue along with interest and equal amount of penalty imposed.
2. After hearing both sides for some time, I find that the appellant has already reversed the CENVAT Credit as it was pointed out by the audit party and has filed Stay Petition for waiver of pre-deposit of interest and penalty only.
3. Learned authorized representatives of the company, submits that they are not contesting the reversal of CENVAT Credit made by them and are contesting the issue only as regards interest and penalty.
4. I find that the appeal itself could be disposed of at this juncture. Accordingly, after allowing the Stay Petition for waiver of pre-deposit of interest and penalty, I take up the appeal itself for disposal.
5. Ld. Authorised representative of the assessee draws my attention to the Show Cause Notice issued. It is his submission that the CENVAT Credit was taken by the appellant on the Service Tax paid on courier service, telephone service, security service and various other services. It is his submission that out of all the services, one ineligible CENVAT Credit which they have availed is in respect of the invoices issued in the name of M/s Amal Products Limited which is not in the name of M/s Atul Limited, the present assessee. It is his submission that though they have paid the amount under protest, they are not contesting the issue on merit.
6. Ld. D.R. of the Revenue reiterates the findings of the lower authorities.
7. On perusal of the records, I find that the issue involved in this case is regarding in-eligible CENVAT Credit of the Service Tax paid on courier/telephone services etc. Since the appellant is not contesting the reversal already made by them, their appeal to that extent is rejected and I uphold the order of the lower authorities for the purpose of confirmation of demand of Rs. 6,80,67/- .
8. As regards interest demand raised, I find that the appellant having accepted that they are not eligible for availing CENVAT Credit, the interest liability arises and they are liable to pay interest on the CENVAT Credit availed which has been calculated as Rs. 53,913/-. The appellants are directed to deposit the amount of interest of Rs. 53,913/- within thirty days from the date of receipt of this order and report compliance to adjudicating authority of the jurisdictional Assistant Commissioner.
9. As regards the penalty imposed, I find that the penalty has been imposed under Rule 15 of CENVAT Credit Rules, 2004 read with Section 11AC of Central Excise Act, 1944. On perusal of the records, I find that the appellant has reversed the CENVAT Credit which has been pointed out as erroneously taken in August and September 2008 itself. It is also to be noted that the credit which has been availed on courier/telephone/security services, if would have been contested on merit they may have succeeded, as these services are eligible for availing CENVAT credit of Service Tax paid.
10. Keeping all this in mind, I find that the equivalent penalty imposed on the appellant is unwarranted and is liable to be set aside. In the facts and circumstances of the case, the appellant having paid the entire amount of Service Tax liability and is ready to discharge the interest liability which has been confirmed, I find that the impugned order to the extent it imposed equal amount of penalty on the appellant, is liable to be set aside and I do so.
11. The assessee’s appeal to the extent of penalty is allowed and the impugned order to that extent is set aside.