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2024 (2) TMI 86 - CESTAT CHENNAIReversal of CENVAT credit attributed to common input services used in taxable and exempted services - Applicability of Rule 6(3) of the CENVAT Credit Rules, 2004 - levy of interest and penalty - HELD THAT:- It is a fact on record that the appellant has rendered works contract service to Chennai Airport which are specifically excluded from the levy of service tax as provided under clause (zzzza) of Section 65(105) of the Finance Act, 1994. The appellant tried to make a distinction between exempted services and services which are excluded from the payment of service tax and argued that the provisions of Rule 6(3) of CENVAT Credit Rules, 2004 are not applicable in the present case on hand. From the definition of ‘exempted services’ as defined under Rule 2(e) of CENVAT Credit Rules, 2004, it is very clear that exempted services would also include services on which no service tax is leviable under the Act. Since no service tax is leviable on the works contract service rendered by the appellant to Chennai Airport project, these services have been rightly considered as exempted services by the authorities below. Thus, the demand has been rightly confirmed in the impugned order. Accordingly, the demand of Rs.42,81,673/- being equal to 6% of the value of the exempted services confirmed in the impugned order along with interest is upheld. Penalty imposed under Rule 15 of the CENVAT Credit Rules, 2004 r/w section 78 of the Finance Act, 1994 - HELD THAT:- The appellant has already paid an amount of Rs.42,81,673/- on 28.2.2013. We find that there is no evidence brought on record to establish suppression of facts with an intention to evade payment of the tax. Accordingly, this is a fit case for invocation of provisions of section 80 of the Finance Act, 1994 to waive the penalty imposed. Appeal disposed off.
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