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2018 (9) TMI 1661 - CESTAT CHENNAIReversal of CENVAT Credit - Prescribed formula - Since appellant were providing both taxable and exempted services, they opted for reversal of proportionate credit of service tax in terms of the formula given in Rule 6 (3A) of Cenvat Credit Rules, 2004 - reversal as per formula prescribed under Rule 6 (3A)(b)(iii) - Held that:- There is no dispute that the appellant has discharged the service tax liability on Financial Leasing Services by availing the exemption under N/N. 4/2006, dated 01.03.2006. The said notification specified that service tax is required to be paid on a value equal to 10% of the total amount representing interest. Balance 90% will enjoy exemption from payment of service tax. For Financial Leasing Services under section 65 (105)(zm), there is no doubt that service tax is payable even though a part of it is exempted by the above notification. Since service tax is payable, the said service cannot be covered by the definition of “exempted services” - once it is concluded that the Financial Leasing Service is not an exempted service, there is no justification in considering the portion of the value of taxable service exempted vide N/N. 4/2006, dated 01.03.2006 to be included in the formula for determining the amount to be reversed. Appellant has already reversed the Cenvat credit determined in terms of the above formula without including the portion of the value exempted under N/N. 4/2006 - there is no justification to order any further reversal. Appeal allowed - decided in favor of appellant.
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