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2016 (1) TMI 972 - CESTAT MUMBAICenvat Credit - demand of 8% on value of Exempted services - Rule 6(3)(i) of the Cenvat Credit Rules, 2004 - appellants had not filed a declaration under Rule 6(3A) - It is urged that unreasonable result cannot be intended by the legislature - The appellants have already reversed the CEnvat credit of ₹ 5,06,736/- attributable to input services used in providing exempted services during the financial year 2008-09 along with the interest of ₹ 21,658/-. - Reversal was not on monthly basis. Held that:- It is evident that the condition of filing the declaration is only directory and not mandatory. Further, most of the requirements under Rule 6(3A) like, name, address and registration no. of the assessee, description of taxable services and exempted services, CENVAT Credit of inputs and input services lying in balance as on the date of exercising option, are already available in the records of the Revenue. We further find it is an admitted fact that the assessee herein have calculated the CENVAT Credit in terms of clause (c) read with clause (h) and have deposited the amount so determined, by 30 th June in the succeeding financial year as prescribed. There is no dispute with regard to the CENVAT Credit reworked by the assessee which is attributable to the exempted output services. Further, there is merit in the contention of the assessee that Rule 6 cannot be used as tool of oppression to extract the amount which is much beyond the remedial measure and what cannot be collected directly, cannot be collected indirectly, as well. In case of substantive compliance made by the assessee i.e. calculation of the amount of CENVAT Credit reversible on annual basis and payment of the amount before the prescribed date, the substantial benefit cannot be denied. We also hold that in the garb of Rule 6, the provisions of Section 93 of the Finance Act, 1994 cannot be overridden and/or the exemption provided under the Section 93 of the Finance Act, 1994 cannot be negated by the Cenvat Credit Rules, which is a delegated legislation and subservient to the main Act. Demand set aside - Decided in favor of assessee.
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