2008 (2) TMI 90

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.....   It is the submission of the Ld. SDR that the  respondent in this case has not maintained separate records for utilization of the credit taken and the services received by them for exempted and for the non-exempted categories. He submits that the provisions of Rule 6 (3) (c) will be applicable and the respondent is entitled  to utilize  only 20% of the amount of credit that is available to him as a credit. The authorised representative of the  respondent on the other hand submits that the provisions as appreciated  by the Commissioner (Appeals),  is correct and  submits that the order interprets the law as is in the Rule books.  It is his submission that the credit of Service Tax paid on the ser .....

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..... 6 (5)  the important portion here is the word "not withstanding". The very use of this word means that Rule 6 (3) is not applicable for the input services mentioned under Rule 6 (5). In fact in para 9, the adjudicating authority himself has said that "it is clear that a service provider, who provides taxable and exempted services shall be allowed, credit of the whole of service tax paid on taxable services specified in the said sub-rule 6 (5) unless the  said service is exclusively used in or in relation to manufacture of exempted goods or providing exempted services although no separate accounts for receipt/consumption of the input services  are maintained". Now after writing this sentence how he confirms the demand is not .....

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..... hstanding", which would indicate that the provisions of Rule 6 (3) are not applicable for the provisions of Rule 6 (5) of Cenvat Credit Rules, 2004.  If it is undisputed that the service tax credit availed is on the service as mentioned in Rule 6 (5), the credit of the entire/whole amount of service tax has to be allowed to the respondent. 7. It was sought by the Ld. SDR to distinguish the word "as to taking and allowed' of the credit.  I am unable to understand the stand of the revenue.  If an assessee to takes eligible credit he should be allowed to utilize the same, also there would no reasoning for allowing the credit and not permitting the utilization. This would go against the substantive legislation of the Cenvat .....

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