TMI Blog2017 (5) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... 994 does not extend to State of Jammu and Kashmir, output services provided there are not subject to tax. However, in the matter of rendering such service, it is moot whether the provision of services to the excluded territory required additional use of input/input services. Nor is it the case of the tax authorities that the scale of services rendered in the rest of India could have been achieved by isolating a portion of the inputs/input services as attributable to services rendered in the State of Jammu and Kashmir. In such a situation, there is no logic or soundness to hold that the inputs/input services used for rendering 'broadcasting service' should be restricted to such as evidenced to have been used for rendering service in the rest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmation and database, intellectual property rights, maintenance and repair, renting of immovable property, sale of space and time for advertisement and management consultancy and avail CENVAT credit on a number of input services. Recovery was ordered on the ground that appellant, while providing 'broadcasting service' with effect from the 1 st July 2001 had failed to maintain separate records for taxable and exempted services even though the services provided in the State of Jammu and Kashmir by the appellant were not subject to service tax owing to exclusion of that territory from the ambit of Finance Act, 1994. According to the impugned order, they were, in the circumstances of exclusion, permitted to discharge only 20% of the ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) and (2), the manufacturer or the provider of output service, opting not to maintain separate accounts, shall follow either of the following conditions, as applicable to him, namely :- (a) if the exempted goods are- Xxxxxx the manufacturer shall pay an amount equivalent to the CENVAT credit attributable to inputs and input services used in, or in relation to, the manufacture of such final products at the time of their clearance from the factory; or (b) if the exempted goods are other than those described in condition (a), the manufacturer shall pay an amount equal to ten per cent of the total price, excluding sales tax and other taxes, if any, paid on such goods, of the exempted final product charged by the manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms Service Tax, Hyderabad - I [2013-TIOL-1976-CESTAT-Bang] was cited. Relying upon the decision of Hon'ble Supreme Court in Union of India v. Kanunga Industries [2004 (178) ELT 19 (SC)], the appellant further contends that the taxation statutes have to be construed strictly and benefit of doubt, if any, has to accrue to the assessee. 4. It is contended that there has been no willful misrepresentation or attempt to evade tax and, hence, invoking of the extended period, as well as penalty under section 78 of Finance Act, 1994, is not appropriate. It is further submitted that the decision of the Tribunal in Mumbai International Airport Pvt Ltd v. Commissioner of Central Excise, Mumbai-V [2014 (33) STR 308 (Tri-Mumbai)] m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant provisions of Rule 6 of CCR have been extracted and we are not doing this because only two aspects required to be noted are maintaining of separate accounts and limit for utilization of Cenvat credit. There is no dispute about the quantification. 6. Reliance is placed upon the decision of Hon'ble High Court of Bombay in Mercedes-Benz India Pvt Ltd v. Commissioner of Central Excise, Pune - I [2016 (41) STR 577 (Bom)] to sustain the findings of the original authority. 7. It is appropriate that we look at the provisions of the CENVAT Credit Rules, 2004 in the context of its intent. Doubtlessly, every provider of output service or manufacturer is entitled to avail and take credit of duty/tax included in the consideration f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hold that the inputs/input services used for rendering 'broadcasting service' should be restricted to such as evidenced to have been used for rendering service in the rest of India. In these circumstances the availment the CENVAT credit to the full extent cannot be questioned. It's utilisation thereof cannot also be restricted. 9. If the output service were to be distinctly identifiable as one which is exempt (other than territorially) in contradistinction with a taxable service and if the input/input services were distinctly divisible, though not procured separately, the provisions of rule 6 of CENVAT Credit Rules, 2004 would come into play. As the entire quantum of input services would be required to provide the taxable ser ..... X X X X Extracts X X X X X X X X Extracts X X X X
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