Custom, Excise & Service Tax Tribunal
Elcomponics Sales P Ltd vs Commissioner Of Gst&Amp;Cce(Chennai ... on 1 November, 2018
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
Appeal No. E/41886/2018
(Arising out of Order-in-Appeal No.128/2018 (CTA - II) dated
23.3.2018 passed by the Commissioner of GST & Central
Excise (Appeals - II), Chennai)
M/s. Elcomponics Sales Pvt. Ltd. Appellant
Vs.
Commissioner of GST & Central Excise
Chennai Outer Respondent
Appearance Shri G. Thangaraj, Consultant for the Appellant Shri L. Nandakumar, AC (AR) for the Respondent CORAM Hon'ble Ms. Sulekha Beevi C.S., Member (Judicial) Date of Hearing / Decision: 01.11.2018 Final Order No. 42749 / 2018 Brief facts are that on verification of accounts of the appellant, it was noticed that in the balance sheet of the year 2014 - 15, the appellant had made provisions for write off of old inputs but had not reversed the credit in respect of such inputs. On being pointed out, the appellant reversed the credit. However, show cause notice was issued proposing to recover the irregularly availed credit along with interest and imposed 2 penalty. After due process of law, the original authority confirmed the demand, interest and also imposed equal penalty. In appeal, Commissioner (Appeals) upheld the same. Hence this appeal.
2. On behalf of the appellant, ld. consultant Sh. G. Thangaraj submitted that the appellant is contesting only the interest and penalty imposed. He submitted that on being pointed out, the appellant had reversed the irregularly availed credit and had sufficient balance of credit during the disputed period. Since the appellant has reversed the credit before utilization, he prayed that the interest and penalty may be waived. He relied upon the decision in the case of Strategic Engineering P. Ltd. - 2014 (310) ELT 509 (Mad.) and Tata Business Support Services Ltd. Vs. Commissioner of Service Tax - 2017 (52) STR 346.
3. The ld. AR Shri L. Nandakumar supported the findings in the impugned order.
4. After hearing both sides, it is seen that the appellant has reversed the credit even before issuance of the show cause notice. It is also not the case of the department that they have utilized the credit. Following the decision of the Hon'ble High Court of Madras in the case of Strategic Engineering P. Ltd. (supra) as well as the decision of the Tribunal in Tata Business Support Services Ltd. (supra), I am of the view that the 3 demand of interest and penalty cannot sustain. The same is set aside without disturbing the duty demand or the appropriation of the irregularly availed credit. The appeal is partly allowed in the above terms with consequential relief, if any.
(Dictated and pronounced in open court) (Sulekha Beevi C.S.) Member (Judicial) Rex