Ashok Jindal, Member (Judicial)

The appellants are in appeal against the impugned order confirming the demand of service tax along with interest and penalty under Section 76 and 77 of the Finance Act, 1994.

2. The facts of the case are that the appellant are engaged in the activity of Industrial Construction Service. The appellant claimed abatement as per Notification 1/06 which specifies that if the assessee does not take CENVAT credit of input/input service, the assessee is entitled abatement of 67% from their gross taxable service for payment of service tax. From the ST-3 returns, it was found that in the month of March 2006, the appellant has availed CENVAT credit and abatement also as per Notification 1/2006. A show-cause notice was issued and demand was confirmed along with interest and various penalties were imposed. The first appellate authority dropped the penalty under Section 78 and confirmed the adjudication order. Against that order, appellant is before us.

3. Shri T.C. Nair, advocate for the appellant submitted that CENVAT credit availed by the appellant was more than the liability of service tax and the appellant being a proprietary concern, could not get proper advice from their consultant, therefore the mistake was committed. He further submitted that it was a bona fide mistake of the appellant who availed CENVAT credit as well as abatement. He further submitted that this is the first and last mistake committed by the appellant therefore, considering the provisions of Section 80 of the Finance Act, 1994, penalty be dropped.

4. Heard the ld. counsel.

5. Considering the submissions made by the ld. counsel, we find that the appeal itself can be disposed of at this stage. As the appellant has paid the entire demand of service tax, we have taken up the appeal for final disposal.

6. As it is prayed on behalf of the applicant the benefit of Section 80 of the Finance Act 1994 be given being a bona fide mistake committed by them and did not suppress any material fact from the department. Therefore, considering the prayer made before us, we find that it is a fit case for invoking the provisions of Section 80 of the Finance Act, 1994. Accordingly, we drop the penalty confirmed against the appellant. Appeal is disposed of in the above terms.