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M/s Srivalli Shipping & Transport Versus CCE, C & ST, Visakhapatnam

2017 (11) TMI 33 - CESTAT HYDERABAD

CENVAT credit - providing of taxable as well as exempt services - non-maintenance of 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 CCR, 2004 - legality of the demand to disallow and recover CENVAT credit on input services exclusively used for exempted output services to the tune of ₹ 91,16,244/- Held that: - whereas appellants have claimed that they have made payment of entire amou .....

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of CENVAT credit of ₹ 91,16,244/- apparently taken in excess and irregularly, without any justification for that decision. In our view, such peremptory confirmation of demand without resolving the very evident confusion in the working thereof, cannot be sustained - matter on remand. - Legality of demand of ₹ 34,20,440/- for the period April 2008 to March 2010 under Rule 6(3) of CCR, 2004 - Held that: - the manner of calculation of 6% or 8% on value of exempted services has not b .....

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ellant and the department on the method and manner of calculating the amount of CENVAT credit that can be availed in the situation where both exempted and taxable output services were provided. In these circumstances, we are of the considered opinion that imposition of penalty in this case would be a overkill - penalty set aside. - Appeal allowed in part and part matter on remand. - ST/2004/2012 - A/31721/2017 - Dated:- 24-10-2017 - Mr. M.V. Ravindran, Member (Judicial) And Mr. Madhu Mohan D .....

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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 inve .....

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o March 2010. Imposition of penalties under various provisions of law was also proposed. After due process of adjudication, adjudicating authority vide impugned order dated 30.03.2012 confirmed the proposed demands and also imposed equivalent penalties under Rule 15 (4) of the CCR, 2004 read with Section 78 of the Finance Act, 1994. Aggrieved appellants are before this forum. 2. On 07.09.2017, when the matter came up for hearing on behalf of appellants, Ld. Advocate Sh. M.S. Nagaraja made oral a .....

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amounts to not taking the credit and the consequences of Rule 6(3) are not attracted. (iii) The Commissioner relying on the decisions of the Tribunal referred to in Para 12 (f) has recorded in Para 12 (g) that the payment of 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 th .....

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nt made covered all the input services. The word entire credit denotes the entire amount irregularly taken and leaves no scope for doubt. (v) Assessee has the option either to pay (i) an amount equal to 6% or 8% of the value of exempted service, or (ii) pay an amount equal to CENVAT credit attributable to input services in or in relation to provision of exempted services. The payment of CENVAT credit on common input services along with interest, which is acknowledged and appropriated, amounts to .....

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010 (258) ELT 575 (T-Del)] (d) Sahyadri Starch & Industries Pvt Ltd., Vs CCE [2016-TIOL-615-CESTAT-MUM] (vii) Appellants have been submitting half yearly ST-3 Returns showing the details of CENVAT credit taken on input services. The appellants submit that Table 5A specifies whether the assessee has provided exempted or non-taxable service in terms of Yes or No. Table 5AA of ST-3 Return provides for value of exempted service and the amounts payable under Rule 6(3) of the CENVAT Credit Rules, .....

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sessee, 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) legality of the demand to disallow and recover CENVAT credit on input services exclusively used for exempted output services to the tune of ₹ 91,16,244/-, (ii) legality of demand of ₹ 34,20,440/- for the period April 2008 to March 2010 under Rule 6(3) of CCR, 2004 .....

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e on taxable output service. 6.2 As per the Annexure-I to the show cause notice, the service tax paid for the period 31.12.2005 to 31.12.2008 has been worked out as ₹ 177,03,348/-. Based on this figure the excess CENVAT credit availed has been worked out at ₹ 91,16,244/-. 6.3 Appellants are not disputing that CENVAT credit availment for the period up to 31.03.2008 as to be capped at 20% of service tax payable. 6.4 However, it emerges from para 12 of the impugned order that whereas ap .....

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lish 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 transaction .....

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nd fair. We are therefore of the considered opinion that this matter relating to excess input service credit availed while providing both exempted and taxable output services, will require to be remanded for denovo consideration by adjudicating authority. Needless to say, in such denovo proceedings, the adjudicating authority will give suitable opportunities to the appellant to present their case including submission of additional document in support of their case. So ordered. 7.1 Coming to the .....

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