CESTAT, AHMEDABAD BENCH
Prayas Casting Ltd.
Commissioner of Central Excise, Vadodara
FINAL ORDER NO. A/544/2012-WZB/AHD
STAY ORDER NO. S/674/2012-WZB/AHD
APPLICATION NO. E/S/746 OF 2011
APPEAL NO. E/683 OF 2011
APRIL 12, 2012Online GST Certification Course by TaxGuru & MSME- Click here to Join
M.V. Ravindran, Judicial Member
This Stay Petition is filed for waiver of pre-deposit of penalties imposed by the adjudicating authority and upheld by the first appellate authority.
2. After considering the submissions made by both sides for sometime on the Stay Petition, we find that the appeal itself can be disposed and hence after allowing the Stay Petition, we take up the appeal for disposal.
3. Heard both sides and perused the records.
4. The issue involved in this case is regarding ineligible Cenvat credit challenged by the appellant of the Service Tax paid by the service provider.
5. On perusal of the records, we find that the appellant had availed Service Tax credit of Rs. 50,239/- which is the value of the invoice instead of Service Tax paid of Rs. 5,704/-. The said credit was availed on 12-7-2006. When the records of the assessee were scrutinized, Audit party pointed out the error of availment of excess Cenvat credit. The assessee reversed the inadmissible Cenvat credit on 5-3-2007, but did not pay the interest. Subsequently, the interest was also paid by the assessee. The stand of the assessee before the lower authorities that it was inadvertent mistake and there was no mala fide in availing the ineligible excess credit. On perusal of the Show-Cause Notice, we find that the Show Cause Notice only alleges the violation of provisions of Rule 14 of Cenvat Credit Rules, 2004 read with section 11AB of Finance Act, 1994 (sic). The said Show-Cause Notice does not allege any mala fide on the appellant for availment of excess credit. In our view, having reversed the ineligibly availed the Cenvat credit on being pointed out by the Audit party, the appellant has shown their bona fide on admitting the error. In view of this, we are of the view that the impugned order which upholds the imposition of penalty on the appellant is liable to be set aside and we do so.
6. As regards the interest liability, we do not wish to interfere with the order of first appellate authority, as the appellant has already paid the said interest.
7. The appeal is disposed of as indicated above.