PUNJAB STEELS Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THIS is an application for waiver of the requirement of pre -deposit of penalty confirmed on the Appellant by the impugned order. The Appellant manufactured Steel Ingots for which they received some inputs. They have been taken Cenvat credit of Central Excise Duty paid on the input and capital goods. They have also taken credit of the service tax paid on the Goods Transport Agency Service received by them in respect of input goods. The Appellant removed some inputs/in respect of which Cenvat credit had been taken, as such and in terms of the provisions of Rule 3(5) of the Cenvat Credit Rules' 04 reversed only the Central Excise Duty credit but did not reverse Cenvat credit of the service tax on Goods Transport Agency's service which has been used for receipt of those inputs. The Department is of the view that in such cases along with the reversal of the Cenvat credit of excise duty paid on the inputs, the credit of the service tax on the Goods Transport Service used for receipt of the inputs should also be reversed. The Appellant reversed the service tax credit in respect of Goods Transport Agency Service totally amounting to Rs. 2,75,684/ - in Dec' 05 along with interest. The Department, thereafter, issued a show cause notice for confirmation of the demand of allegedly wrongly taken service tax credit along with the interest and also for imposition of penalty. The Asstt. Commissioner vide order -in -original dt. 19 -12 -07 confirmed the Cenvat credit demand of Rs. 2,75,684/ - along with interest, appropriated the amount already deposited by the Appellant towards service tax and interest, and besides this also imposed penalty of equal amount under Rule 15 of Cenvat Credit Rules. The Appellant's appeal before the Commissioner (Appeals) was dismissed by the Commissioner (Appeals) vide impugned order dt. 7 -8 -08. It is against this order that the present appeal along with the stay application has been filed. Since the service tax credit along with interest has already been reversed by the Appellant, the request...for waiver of requirement of pre -deposit of penalty.

(2.) SHRI Gaurav Agrawal, Advocate, the ld. Counsel for the Appellant pleaded that Rule 3(5) provides reversal of credit of duty paid on the inputs when some cenvated inputs or capital goods are cleared as such and that at the time of removal of any Cenvated inputs as such, it is only the Central Excise Duty credit which is required to be reversed and not the Service Tax credit of the service tax paid on the GTA Service in connection with the receipt of those inputs. He, therefore, pleaded that Asstt. Commissioner's impugned order is incorrect; that the appellant have a strong prima facie case and that in view of this, pre -deposit of penalty be waived.