TMI Blog2017 (8) TMI 786X X X X Extracts X X X X X X X X Extracts X X X X ..... t is that since the same was availed under the erstwhile Rule 6 of Service Tax Credit Rules, 2002. This is without any basis. Rule 11 of CENVAT Credit Rules, 2004 provides for the transitory provision to avail and utilize the credit which was accumulated prior to coming into existence of the new legislation of CENVAT Credit Rules, 2004. On such score, we find that disallowance of ₹ 39,09,292/- for this reason also is unjustified - The impugned order dropping the demand of ₹ 39,09,292/- is upheld and the order passed by the Commissioner disallowing the credit of ₹ 49,00,192/- is modified to the extent of allowing the credit of ₹ 39,09,242/- and disallowing the balance. Appeal allowed - decided partly in favor of ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n separate accounts for the use of any packing materials for the duty payable and exempted refined sunflower oil and a show cause notice was issued proposing demand for a sum of ₹ 3,77,87,826/- being the 8% and 8.2% of the total value of clearances of exempted refined oil for the period March 2004 to 9.9.2004. 3. Secondly, the assessee used credit availed on common inputs and input services in the manufacture of exempted refined oil during 10.9.2004 to February 2005. They failed to maintain separate account and a demand was proposed for this period for a sum of ₹ 3,69,02,769/- being the 10.2% on the total value of clearances of exempted refined oil. 4. Thirdly, assessee availed credit of the service tax on input services p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder-in-Original, which is impugned herein, the Commissioner of Central Excise dropped the demand of ₹ 3,77,87,826/- for the period 3/2004 to 9.9.2004, dropped the demand of ₹ 3,69,02,769/- for the period 10.9.2004 to February 2005, dropped the demand of ₹ 39,09,242/- being the credit of service tax paid on input services for the period 6/2003 to 9.9.2004, dropped the demand of ₹ 2,10,816/- being the credit availed on furnace oil. However, the Commissioner, disallowed the credit of ₹ 49,00,194/- which was a demand raised in the second show cause notice and ordered for recovery of the same along with interest. No penalty was imposed. Thus, on the disallowance of credit of ₹ 49,00,194/- the assessee has fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to deny the credit in the second show cause notice for the same period alleging that such input services are not connected with the output services provided by the appellant. Learned counsel argued that the assessee was eligible for the credit which was availed under the erstwhile Rule 6 of Service Tax Credit Rules, 2002 since such services were used for providing output services of clearing and forwarding agent service. Further, that Rule 11 of CENVAT Credit Rules, 2004 provided the transitory provision whereby the assessee was eligible to utilize the CENVAT credit that has been accumulated. That department has wrongly interpreted Rule 11 by observing that only if the credit is accumulated under CENVAT Credit Rules, 2002, can the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same period which is for April 2003 to 9.9.2004 and to demand an amount of ₹ 49,00,196/-. The main allegation in the show cause notice is that the credit is not eligible as it was availed by the assessee under the erstwhile Rule 6 of Service Tax Credit Rules, 2002 and also for the reason that the advertisement and insurance services have no nexus with the output service of clearing and forwarding agent service. The learned counsel for assessee has submitted that they are confining their contest to the amount of ₹ 39,09,292/- alone. We, therefore, confine our discussion also with respect to this amount. It is brought out from the records as well as submissions made by both sides that the main allegation raised by department is th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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