Dm Estates Pvt. Ltd vs Commissioner Of Service Tax Bangalore
- CitationAppeal No. 118/2014 dated 12/02/2014 passed by the Commissioner of Central Excise, Bangalor
Ratio decidendi
The rule this decision rests on
The tribunal holds that where the only amount demanded in the show-cause notice is interest on cenvat credit, and the adjudicating and appellate authorities have not confirmed any demand for the credit itself beyond that proposal, the liability is confined to the interest so proposed. Where the assessee's conduct, though a breach of the cenvat rules, is accompanied by a substantial credit balance throughout the relevant period such that the disputed credit was never in fact utilised to its prejudice, and the amount involved is small, a penalty may be set aside under Section 80 of the Finance Act, 1994, on the ground of reasonable cause.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
[Arising out of Order-in-Appeal No. 118/2014 dated 12/02/2014 passed by the Commissioner of Central Excise, Bangalore (Appeals-II)]
For approval and signature:
HON'BLE Mr. B.S.V. MURTHY, TECHNICAL MEMBER
1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes
Dm Estates Pvt. Ltd. 150, Embassy Point, 1st Floor, Infantry Road Bangalore 560 001 Karnataka Appellant(s)
Versus Commissioner of Service Tax Bangalore 1st To 5th Floor, TTMC Building, Above BMTC Bus Stand, Domlur Bangalore 560 071 Karnataka Respondent(s)
Appearance:
Mr. S. Sivakumar, Advocate #1/1, Seventh Main, Opp: Lakshmipuram Bus Stop, Indiranagar Second Stage Bangalore 560 038 For the Appellant
Mr. N. Jagdish, AR For the Respondent
Date of Hearing: 20/03/2015 Date of Decision: 20/03/2015 CORAM:
HON'BLE Mr. B.S.V. MURTHY, TECHNICAL MEMBER
Final Order No. 20817 / 2015
The dispute started between the assessee and the department after an audit. The dispute is whether the appellant has taken the cenvat credit without receiving the invoice in November 2007. It is the departments contention upheld by the lower authorities that the invoice was dated 31.03.2008 whereas the credit was taken in November 2007. The learned counsel submits that the amount involved is only interest for the period. He submits that appellant had produced CA certificate and even now it is their claim that they can show that the credit had not been taken in advance. While admitting that there was regular correspondence for 39 months on this issue, he submits that he could not satisfy the departmental authorities that the credit had been correctly taken. Learned AR would submit that other than CA certificate, appellant did not produce any evidence.
2. Further there is also another angle to this issue. In the order passed by the learned Commissioner (Appeals), it is not clear as to whether he is confirming the demand for cenvat credit and interest or he is confirming only interest. After observing in the paragraph he has come to the conclusion that appellant is liable to pay only interest, in the final conclusion he has upheld the order of the lower authority who had confirmed the demand also for cenvat credit. It is also agreed by both the sides that in the show-cause notice there was no proposal to recover the cenvat credit but the proposal was to recover interest of Rs. 25,643/- (Rupees Twenty Five Thousand Six Hundred and Forty Three only).
3. The discussion above would show that appellant is liable to pay only interest of Rs. 25,643/- (Rupees Twenty Five Thousand Six Hundred and Forty Three only) even if all other submissions are ignored. Having regard to the amount involved and the facts and circumstances discussed above, both sides agree that the issue can be settled finally at this stage itself. The discussion would show clearly that interest is liable to be paid and learned counsel fairly agrees to pay the same.
4. As regards penalty learned AR submits that this is a clear case of suppression and penalty has been correctly imposed and therefore no leniency is called for. However submission was made by the learned counsel that the appellant during the entire period from November 2007 to March 2008, had substantially more credit and therefore the entire amount of cenvat credit which has never been utilized by the appellant. Moreover it is still the claim of the learned counsel that they can show it that they have not taken credit earlier but he does not want to take this claim up to the logical end because the amount involved is only Rs. 25,643/- (Rupees Twenty Five Thousand Six Hundred and Forty Three only). Under these circumstances this is a fit case for application of Section 80 of Finance Act 1994 and setting aside the penalty and I do so.
5. In the result the demand for Rs. 25,643/- (Rupees Twenty Five Thousand Six Hundred and Forty Three only) being the interest on cenvat credit is upheld and penalty is set aside.
(Order dictated and pronounced in open court)
(B.S.V. MURTHY) TECHNICAL MEMBER
iss
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