Order date: 28 September 2022 

Fact

• The appellant, M/s Maa Chamunda Construction Company, is registered with the Service tax Department and are providing services under the Works Contract Services, Supply of Tangible Goods and Supply of Manpower.
• Based on third party data in the Form  No. 26AS as compared with the appellant’s balance sheet and ST-3  returns, it appeared to Revenue that appellant have short paid service tax amount for the period 01.10.2014 to 30.06.2017, under works contract service, SOTG and Manpower Supply service.
• A show-cause notice has been issued on 24.06.2020 to recover amount short paid. The appellant have deposited the amount short paid and penalty Under Section 77 after taking adjustments of undisputed input service tax for input services received during financial year 2014-15. The same are dully recorded in the books of account. 
• Further, the cenvat credit availed on input service received during the period 2014-15 was denied as according to the Rule 4(1) 3rd proviso of cenvat credit rule, the credit should be availed within a period of six month from the date of invoice. The proposed demand was confirmed and demanded penalty Under Section 77,and 78 of the Act. 

Issue 

• Whether cenvat credit on input services have been rightly demanded and penalty has been rightly imposed under Section 78 and 77 of the Act?4

Order 

• The Tribunal observed that the transaction of input service of SOTG is duly recorded in the books of accounts. The appellant have received the service with supporting invoices and payment have been made in the regular course of business mainly through bank transfer as is evident from the copy of ledger account of the service provider maintained by the appellant in the books of account. The amount paid are also reflected in the bank account of the appellant, thus, the genuineness of the transaction is established.
• Thus the penalty is not imposable under Section 78 as it is found that the short payment is mainly attributable to clerical error. 
• So far as penalty under Section 77 is concerned, the same is confirmed as there is admittedly failure on the part of the appellant to assess and pay correct duty/ tax. 
• The impugned order is set aside and  appeal is partly allowed.