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2019 (2) TMI 598 - AT - Service TaxCENVAT Credit - common inputs/input services used for the trading activity - Rule 6(3)(ii) of CCR 2004 - the proportionate Credit in respect of the trading activity already made - Department took the view that the appellant has to pay 5%/6% respectively of the value of exempted services, as required under Rule 6(3)(i) of the CCR, 2004. Whether the appellant is liable to pay an amount equal to 6% of the value of exempted services or products when they have opted to reverse the proportionate Credit in respect of the trading activity (exempted service)? Held that:- Rule 6(3A) provides for intimating the Department by issuing a letter as to the exercise of option of reversal of proportionate Credit - Further, in this case, the appellants have in fact issued a letter dated 16.05.2013 to the jurisdictional Range Officer, explaining that they were availing only the proportionate Credit on the value of taxable services, which is also reflected in their balance sheet as well as their ST-3 returns. The Department ought to have taken note of the fact that the appellant has exercised the option. The Department cannot force the assessee to pay 5% or 6% of the value of exempted services when the assessee has exercised the option of reversing the proportionate Credit - demand set aside - appeal allowed - decided in favor of appellant.
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