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March 2013

Penalty for inadvertent errors – Penalty not imposable when no malafide intention alleged in the Show Cause Notice.

By Puloma Dalal, Jayesh Gogri, Chartered Accountants
Reading Time 1 mins
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Facts

Appellant inadvertently availed CENVAT credit of the value of invoice instead of the amount of service tax. On being pointed out, the Appellant immediately reversed the inadmissible portion of the credit and also paid interest.

Held

Show Cause Notice did not allege any malafide intention on part of the Appellant. Moreover, Appellant has shown its bonafide by reversing CENVAT credit on being pointed out and also paying interest on the same. Tribunal set aside the penalty.

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