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TMI Blog2017 (11) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... e output services. They were also claiming exemption from payment of service tax on the amount received towards providing the service on export cargo, service provided to SEZ units etc., during the course of audit it emerged that appellants were availing common input services like port service, CFS charges, survey fees, telephone services etc., which were utilised for both taxable output services as well as the exempted services. It appeared that appellants were not maintaining separate accounts for receipt, consumption and inventory of input/input services meant for used in output services as required in terms of Rule 6(2) of the CENVAT Credit Rules, 2004. Accordingly, a show cause notice dated 27.07.2011 was issued to the appellants inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire amount of CENVAT credit by the assessee has satisfied the compliance of Rule 6(3)(i). However, the Commissioner has confirmed both the demands in the impugned order by holding in Para 12(h) that it was not clear whether the payment was on all input services and that the assessee has not exercised clear option under Rule 6(3). (iv) The reasoning of the Commissioner is not correct on facts. The Commissioner has recorded in Para 12 (c) that the assessee has paid the entire amount of common input "services along with interest". Having recorded once again in Para 12 (g) that the payment of entire amount of CENVAT credit availed irregularly made by the assessee has satisfied.. there cannot be subsequent finding that it was not clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the CENVAT Credit Rules, 2004. From the perusal of table it may be seen that the same provides for disclosure of the value of exempted services provided, amount paid under Rule 6(3) of CCR, 2004 in CENVAT & cash and total amount paid. However, there is no column for disclosure of the value of non-taxable service which are excluded from levy of service tax as in case of cargo handling service in relation to export cargo. When there is no provision for disclosure of the amount of non-taxable service provided by the assessee, the same cannot be said to be suppression of facts. 3. On the other hand, on behalf of Department Ld. DR Shri R.Srinivas supports the adjudication. 4. The core issues that come up for appellate decision concerns (i) l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o clarity "whether the payment made by the assessee has covered all the input services which are used in exempted output services". The adjudicating authority has also found as follows: "The assesses, while giving reply to the SCN, made an effort to establish the usage of input services mentioned at (i) above in taxable output services. However, it is not clear as to whether the said input services are exclusively used for taxable output services from the statement or the reply. In case any input service credit as mentioned at (i) above is used in exempted/non-taxable services, again in rule 6(3) comes into play and attracts penal provisions for violation of Rule 6(2) of CCR. This aspect can be clarified only from the details of each tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... worked out as Rs. 34,20,440/- 7.2 In this regard, we find that the manner of calculation of 6% or 8% on value of exempted services has not been disputed by the appellant. We also find that with effect from 01.04.2008, Rule 6(3) the CCR, 2004 was specifically amended to bring forth this method of calculation for purposes of Rule 6(3). This being the case, we do not find any infirmity in that portion of the impugned order upholding the demand of Rs. 34,20,440/-, along with interest liability thereon, for the period April 2008 to March 2010. 8. However, coming to the matter of penalty, it is noted that the entire issue has emanated out of a dispute between the appellant and the department on the method and manner of calculating the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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