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2023 (10) TMI 527 - AT - Service TaxCENVAT Credit - Wrong utilization of cenvat credit - input services - credit on the basis of debit notes - common inputs services used for both taxable and exempted services - non-maintenance of separate books of accounts - violation of Rule 6 (1) of CCR, 2004 - non-payment of interest - penalty. Wrong utilization of cenvat credit over and above the 20% of the output tax liability in contravention of Rule 6 (3) (c) of CCR 2004 - HELD THAT:- Prior to 01.04.2008, there was restriction that when an assessee is providing both exempted services and taxable services, the credit can be utilized only upto 20%. In the present case, it is not disputed that the appellant has utilized credit for payment of the service tax beyond the prescribed 20%. This provision imposing restriction was omitted w.e.f. 01.04.2008. After 01.04.2008, there was confusion as to whether an assessee has to repay the amounts so utilized over and above the 20% cap. The Tribunal in the case of M/S. GE MONEY FINANCIAL SERVICES P. LTD. VERSUS COMMISSIONER OF SERVICE TAX, CHENNAI [2019 (5) TMI 1569 - CESTAT CHANDIGARH] had occasion to analyse the very same issue. It was held that the demand to recover the amount utilized over and above 20% cannot sustain and that the assessee would be liable to pay interest for the intervening period from the date of excess utilization of credit till 01.04.2008. It was also held that penalty cannot be imposed. Thus, the demand of service tax to the tune of Rs.24,10,286/- cannot sustain and requires to be set aside. The penalties imposed also cannot sustain and are set aside. However, the appellant is liable to pay the interest on this amount from the date of utilisation of credit till 01.04.2008. Credit availed on various input services - HELD THAT:- The appellant has availed credit on input services in the nature of premium paid on motor vehicle insurance, group insurance for employees, personal accident insurance for employees, life insurance etc. The other services are tour and travel and event management service (entertainment service) - prior to 01.04.2011 the credit would be eligible. It is also to be pointed out that the invoices are issued in the name of the company and the cost of such services has been borne by the company - the appellant is eligible to avail credit of Rs.7,36,922/-. Demand on this ground cannot sustain and requires to be set aside. Credit availed on the basis of debit notes - HELD THAT:- As per Rule 4A of the Service Tax Rules, among other details, the service tax registration number of the service provider has to be mentioned in the invoices. The proviso to Rule 9 (2) of CCR gives discretionary power to the jurisdictional officer to condone lapses of such details in the invoices if it is clear after verification that the tax amount has been paid by the assessee. It is for the jurisdictional officer to verify as to the particulars of tax paid by the appellant to the service provider. Merely because some details are not mentioned in the invoice/document, the substantive right of credit cannot be denied. As there is no allegation in SCN as to the veracity of the document, the credit of Rs.10,67,514/- denied and confirmed by the impugned order requires to be set aside. Non-payment of Interest - levy of penalty - HELD THAT:- There is no positive act of wilful suppression of facts alleged against the appellant. So also, there is no evidence established by the department to show that the appellant has suppressed facts with an intention to evade payment of tax. The only allegation is that non-payment of tax would not have come to light, if the audit party had not verified the accounts. The appellants having disclosed the availment of credit of Rs.8,69,567/- in their ST-3 returns. The penalty imposed alleging wilful suppression of facts is not justified. The same is set aside. Appeal allowed in part.
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