At, Customs Excise Service Tax Appellate Tribunal South Zonal Bench At Chennai
By, THE HONOURABLE MS. JYOTI BALASUNDARAM
For the Appellants: Sundara Rajan, Consultant. For the Respondent: Ms. Indira Sisupal, JDR.
1. The assessees who are engaged in providing photography services did not debit CENVAT credit account for the period 1.2.2005 to 30.6.2006. They debited CENVAT credit account and paid interest on 4.9.2006. The show cause notice issued to the assessees proposed recovery of interest and the imposition of penalty, invoking the extended period of limitation. The adjudicating authority confirmed the demand and appropriated the amount already paid and the penalty under Section 77 but dropped proceedings for recovery of interest and for imposition of penalty under Section 76 and 78 of the Finance Act, 1994. His order was reviewed and the revision order was passed demanding appropriate interest under Section 75 of the Act and imposing penalty of Rs.200/- per day during failure to pay continues or at the rate of 2% of such tax per month whichever is higher, starting with the first day after the due date till the date of actual payment of the outstanding amount of service tax, not exceeding the amount of service tax not paid, w.e.f. 18.4.2006. Hence this appeal.
2. I have heard both sides. The case law relied upon by the assessees namely Ad Vision Vs CST, Ahmedabad
[2011 (21) STR 455] holding that non-debit in CENVAT credit account of service tax is a technical ground and therefore demand of service tax is not justifiable, is applicable on all fours to the facts of the present case. In that case, the Tribunal remitted the case to the original authority to verify CENVAT credit account of the appellants and directed that if sufficient credit was available, it was to be deducted from the actual service tax liability after requiring the assessees to make the debit, if any. In the present case also, the contention of the assessees is that during the period of non-debit, sufficient credit was available. This statement is required to be verified by the adjudicating authority who is also required to consider the question of levy of interest and imposition of penalty, if it is found that sufficient credit was not available.
3. The impugned order is, therefore, set aside and the case remitted for fresh d
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ecision to the adjudicating authority in the light of guidelines set out herein above and after extending a reasonable opportunity to the assessees of being heard in their defence. 4. The appeal is thus allowed by way of remand.