By TIOL News Service

MUMBAI, MAY 05, 2017: THE issue is of availment of CENVAT credit on various services, mostly GTA services, in respect of the goods received in the appellant's warehouse.

It is the case of the Revenue that these goods are traded goods, hence CENVAT credit cannot be availed, while it is the case of the appellant that since these are traded goods, in respect of business activities, CENVAT credit can be availed.

Incidentally, the appellant discharged the entire amount of CENVAT credit involved in dispute and interest thereon before issuance of SCN.

The AA as well as the first appellate authority have invoked the provisions of Section 11AC of the CEA, 1944 r/w rule 15 of the CCR, 2004 to impose penalty on the appellant.

The appellant is before the CESTAT.

The Bench observed -

+ During the relevant period in question i.e. January 2005 to March 2008, the dispute of availing CENVAT credit on the traded goods was before the various forums of the Tribunal and there were decisions holding such CENVAT credit can be availed. Hence the appellant could have entertained a bonafide belief that they can avail the CENVATcredit of the services in respect of traded goods. [ Kundan Cars Pvt. Ltd. = 2016-TIOL-1088-CESTAT-MUM refers ]

+ In view of above, the penalty imposed under Section 11AC read with Rule 15 of the Cenvat Credit Rules is unwarranted.

The penalty imposed on the appellant was set aside while upholding the reversal of CENVATcredit.

The appeal was disposed of.

(See 2017-TIOL-1508-CESTAT-MUM)