9911796707
TMI Blog2014 (12) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... , New Delhi canvasses orders from customers. > Most of the Orders bagged by BHEL are for supply of complete package for Power Plant. The contract involves supply of both BHEL manufactured goods and Bought out goods. > Total price and scope of the Contract bagged from Customer is allocated to the various units of BHEL Manufacturing units and Power Sector Regional Offices by Corporate Office. > Erection and commissioning of both BHEL manufactured goods and Bought out goods at the customers site are executed by BHEL, Power Sector Regional Offices. Service Tax thereon is paid by the Power Sector Regional Offices and not by the Appellant. > Major portion of the equipments are manufactured at the Appellants manufacturing unit at Hyderabad w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... > The appellants have violated Rule 6(3) of CCR 2004 which provides rules for utilizing credit when credit is availed on inputs/input services used for manufacturing/providing taxable and exempted goods/services. > Rule 6(3) as it stood up to 31.03.2008 entitled the Appellants to utilize credit only to the extent of 20% of the Service Tax payable by him on taxable output services. > Rule 6(3)(i) required the Appellants to pay an amount equal to 8% (up to 06.07.2009)/ 6% (up to 31.03.2011) and 5% (up to 31.03.2012) of the value of the exempted services or as per Rule 6(3)(ii) pay an amount equivalent to the credit attributable to inputs and input services used in, or in relation to the provision of exempted services subject to Rule 6 (3A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01.04.2011 involves interpretation of law. 5. For the period prior to March 2011, the learned counsel submitted that trading cannot be considered as an exempted service. We find ourselves in agreement with the submission, since amendments in the relevant rules and provisions were brought in 2011 to deem trading as a service and separate exemption notification was issued making it an exempted service. Prior to that, if a service was non-taxable or exempt, it was to be considered as an exempted service and if common services were used for exempted services and taxable services/dutiable manufactured items, separate accounts were required to be maintained in respect of inputs and input services failing which there were statutory requirements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anyway could have used the credit. The interest liability has been calculated by the appellant as Rs. 15,98,673/- which is payable and is admitted. 7. We have already taken a view that appellant was liable to reverse proportionate credit on the total trading turnover which has been worked out by the appellant as Rs. 31,89,728/- in our opinion has also to be deposited. 8. In the result, in our opinion, the appellant has to deposit an amount of Rs. 15,98,673/- in cash towards interest liability for the period 2007-08 and Rs. 31,89,728/- towards proportionate credit attributable to trading activity for the period prior to 01.04.2011 within eight weeks and report compliance on 21/10/2014. Subject to compliance with the above requirement, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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