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2020 (7) TMI 2 - AT - Service TaxReversal of Cenvat Credit - Input Services - Providing taxable and exempted services - Double credit - Receipt of credit for the benefit of subsidiaries - activity of construction services of roads, power plant, airport, etc. being commercial or industrial buildings or civil works - BAS - consulting engineering services - management or business consulting services - commercial training or coaching Centre services - Activity of construction of toll plaza, administrative building etc. - Rule 6(3) of Cenvat Credit Rules - allegation of double credit taken by the appellant - CENVAT Credit - absence of valid documents - Board’s Circular No. 80/10/2004-ST dated 17.9.2004 - Extended period of limitation - penalty. HELD THAT:- All the services have been used by the appellant in providing output service and thus eligible under the definition of input service under Rule 2(l) of CCR; from the facts on record, it is found that the appellant have already reversed an amount of ₹ 59,43,283/- out of disputed credit for the period October 2007 to December, 2012; the learned Commissioner has erred in holding that banking and financial services, credit rating services are not used for providing output services; such services are required to raise funds, which is essential to carry out the business of the appellant and hence the same is held to be eligible service; as regards the allegation that certain processing charges/banking service was related to GMR Infrastructure Limited (subsidiary company) as reflected in additional credit arrangement letter of the bank, whereas the invoice is in the name of the appellant towards loan processing fee; as the appellant company benefits from profitability and working of subsidiary company, thus the banking and financial charges are eligible input service in respect of the appellant - there is no specific reason assigned for disallowance of Cenvat credit for other input services by the learned Commissioner. Penalty - HELD THAT:- There are no case of suppression, fraud, etc. is made out against the appellant; further, admittedly appellant have maintained proper books of accounts and registers of the transactions and also regularly filed the ST-3 returns and paid the admitted taxes; further, appellant deposited substantial amounts by way of reversal or deposit at the time of audit which have been appropriated in the impugned order; Amount reversed/paid matches the disallowed amount; under such circumstances, we hold that penalty under Section 78 is not attracted - the penalty under Section 77(2) of the Finance Act is also not attracted, hence set aside. Classification of service for the period from 1.6.2007 - HELD THAT:- Revenue holds that the services to be classifiable as “construction service’ under Section 65(105)(zzq), where as per the appellant holds the same to be classifiable under the “works contract service’ defined under Section 65 (105)(zza) of the Act; considering the rival contentions, it is found that admittedly the appellant have executed works contract along with materials, thus, under the facts and circumstances, the construction services are classifiable under “works contract service’ and not as construction service. Thus, under the facts and circumstances, penalty imposed under Rule 15(3) of CCR is also set aside. Appeal allowed - decided in favor of appellant.
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