Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2018 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (9) TMI 295 - AT - Service TaxCENVAT Credit - input services - Department was of the view that the credit availed on the above input services is not eligible for the reason that the said input services are not used for providing output services - Scope of SCN - Held that:- In the instant case, what is alleged in the show cause notice is that as per Rule 2(l) of the CENVAT Credit Rules, 2004, input service means ‘any service used for providing output service’. As trading activity undertaken by the appellant is not taxable service, hence the appellant is not eligible to avail credit on the alleged / impugned input service. This being so, the appellants have clearly fallen foul of Rule 3 of the CENVAT Credit Rules, 2004 since that is the particular provision which lays down the types of duties or taxes or cesses suffered on input, input services etc. which alone can be availed as CENVAT credit. In the present case, only Rule 3 and Rule 6 has not been invoked. When credit is not admissible under Rule 3, the appellant cannot content that Rule 6 ought to have invoked and that trading is held to be exempted service prior to 1.4.2011. The appellant cannot blow both hot and cold. Wrong utilization of CENVAT credit - Demand of ₹ 35,91,928/- with interest - Held that:- Since this being only a part of the total credit amount of ₹ 3,22,07,534/-, the demand of which has already been upheld, it would cause double jeopardy, hence demand of ₹ 35,91,928/-, along with interest, will become a unjustifiable demand and therefore set aside. Penalty u/s 78 - Held that:- This issue involves interpretation whether the availment of impugned credits are in order or otherwise - penalties not warranted and is set aside. The impugned order is modified to the extent of setting aside the demand of ₹ 35,91,928/- and the penalty imposed under section78 of the Finance Act, 1994 without disturbing the remaining part of the impugned order except penalty - appeal allowed in part.
|