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M/s. C.L. Educate Versus Commissioner of Service Tax, Delhi

2015 (10) TMI 2544 - CESTAT NEW DELHI

CENVAT credit - service tax paid on the input services used in the provision of both taxable as well as exempted services - requirement of Rule 6 (3) (c) of the Rules complied with - excess cenvat credit, over and above the prescribed limit of 20% utilized by the appellant - Held that: - Where the service provider provides for both taxable as well as exempted service, sub-rule (2) of the said rules provides for maintenance of separate accounts. In the case, where no separate accounts have been m .....

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paid over and above 20% during the particular month/period, the same is not in conformity with the statutory provisions, and thus, the assessee is required to pay the cenvat credit. - There are no specific restrictions or prohibitions contained in Rule 6 of the Cenvat Rules, providing for reversal of cenvat credit on monthly/periodic basis. Rather, as per the statutory mandates, the amount of 20% has to be paid during a particular financial year, irrespective of the fact that in some months .....

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to be adjusted against utilization in excess of the 20% ceiling, in other months. - Payment of amount by the appellant is in conformity with the provisions of Rule 6(3)(c) of the Cenvat Credit Rules, 2004 - demand of service tax, interest and penalty set aside - appeal allowed - decided in favor of appellant. - ST/51622/2014-ST (SM) - Final ORDER NO. 54119/2015 - Dated:- 15-10-2015 - Mr. S.K. Mohanty, Member (Judicial) Present for the Appellant : Shri Rachit Jain, Advocate Present for the Re .....

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services. As per Rule 6 (3) (c) of the Cenvat Credit Rules, 2004, the assessee is liable to pay 20 per cent of service tax towards the output service by utilizing the cenvat credit. In the present case, in compliance to the requirement of Rule 6 (3) (c) of the Rules, the appellant had discharged the service tax liability towards the provision of taxable service. However, the Department objected to payment of service tax on the ground that during particular month, excess cenvat credit, over and a .....

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ribunal. 2. Shri Rachit Jain, the ld. Advocate appearing for the appellant submits that in compliance with the requirement of Rule 6 (3)(c) of the Cenvat Credit Rules 2004, the appellant had discharged the service tax liability. He further submits that there is no specific restriction/prohibition contained in the said rule that every month the amount of 20% should be paid from the cenvat account. Thus, according to the ld. Advocate, in absence of any specific restrictions contained in the rules, .....

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appearing for the Revenue reiterates the findings recorded in the impugned order. 4. I have heard the ld. Counsel for both sides and examined the case records. 5. Obligation of the service provider, providing taxable as well as exempted service is contained in Rule 6 of the Cenvat Credit Rules, 2004. Sub-rule (1) of the said rule restricts taking of cenvat credit, in the eventuality, where the service provider exclusively provides the exempted service. Where the service provider provides for bot .....

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es. The case of the Department is that on monthly basis, this 20% calculation has to be done and the same should be paid from the cenvat account; and if any amount is paid over and above 20% during the particular month/period, the same is not in conformity with the statutory provisions, and thus, the assessee is required to pay the cenvat credit. To the said specific allegation of the Department, I am of the view that there are no specific restrictions or prohibitions contained in Rule 6 of the .....

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said decision is extracted herein below:- 4.2 The Appellant have pleaded that if the 20% ceiling on utilization is applied only to credit of services other than the services covered by Rule 6(5) and credit of inputs goods other than capital goods, utilization of credit for payment of service tax, in excess of the ceiling has taken place only in January 2005, March 2005 and May 2005 and this excess utilized credit cannot be demanded as Rule 6(3)(c) is silent with regard to the period during whic .....

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