TMI Blog2018 (2) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... zation for extending the benefit of notification. In this scenario, the services provided to World Bank and International Finance Corporation being entities of United Nation, exempted under N/N. 16/2002-ST. - benefit allowed. CENVAT credit - Whether the appellant are entitled for CENVAT Credit in respect of input services namely, credit of Insurance Auxiliary Service, Outdoor Catering Service and Mandap Keeper Service for the period prior to 1.4.2011? - Held that: - the Insurance Auxiliary service used for indemnification of the officials such as Directors, employees, who play key role in providing the output service. The mandap keeper service used for conducting interviews for hiring employees, therefore, it is directly related to the overall providing of output service. Outdoor catering service is provided to the employees and clients of the appellant and the cost of the outdoor catering is incurred by the appellant. Therefore, it qualifies as input service and the credit is admissible. The exclusion clause was introduced on 1.4.2011 - In the present case, the period involved is prior to that date. Therefore, there is no dispute for allowing the credit on the aforesaid service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. (iii) Whether the appellant is entitled to utilize CENVAT Credit more than 20% as provided under rule 6(3)(c) of CENVAT Credit Rules, 2002 in the subsequent period when in the previous period the appellant have utilized credit less than 20% of the total tax liability. In other words, whether the short utilization of CENVAT Credit against the eligible 20% can be carried forward in the subsequent month and such carried forward amount can be utilized, which comes to more than 20% of the total tax liability in the subsequent month. 2. Shri Yash Parmar, learned C.A. appearing on behalf of the appellant submits that as regards the service provided to World Bank and International Finance Corporation, these organizations are part of the United Nations. In this regard, he referred to a website print out of the United Nations wherein the World Bank and International Finance Corporation have been listed as United Nation entities. It is his submission that since both these organizations are part of United Nations, service provided to these organizations is clearly exempted under Notification No. 16/2002-ST. He relies on the following judgments: - (a) CC CE, Kanpur Vs. Jyoti C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NVAT Credit on various services, he submits that these services do not have nexus with the output service. Therefore, the credit was rightly denied by the lower authority. 3.2 As regards the issue of utilization of 20% CENVAT Credit or in excess to that, he submits that Rule 6(3)(c) clearly provides the ceiling of 20% of the total tax payable in a month. Accordingly, even if the appellants have short utilized the Cenvat credit for the previous month against 20% ceiling, the short utilization of credit cannot be adjusted by availing credit more than 20% in the subsequent month. Therefore, the view taken by the lower authority on the issue is correct and legal. 4. We have carefully considered the submissions made by both sides. 5. As regards the issue of exemption in respect of service provided to World Bank and International Finance Corporation, we find that as per organization structure of United Nations, World Bank and International Finance Corporation are enlisted as United Nation's entities, therefore, it is clear that the World Bank and International Finance Corporation are part of the United Nation Organization. 5.1 The contention of the Revenue is that these t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided to World Bank and International Finance Corporation being entities of United Nation, exempted under Notification No. 16/2002-ST. 5.2 As regards the issue of admissibility of the CENVAT Credit in respect of service namely, the Insurance Auxiliary Service, Outdoor Catering service and Mandap keeper service, we find that the Insurance Auxiliary service used for indemnification of the officials such as Directors, employees, who play key role in providing the output service. The mandap keeper service used for conducting interviews for hiring employees, therefore, it is directly related to the overall providing of output service. Outdoor catering service is provided to the employees and clients of the appellant and the cost of the outdoor catering is incurred by the appellant. Therefore, it qualifies as input service and the credit is admissible. The exclusion clause was introduced on 1.4.2011. In the present case, the period involved is prior to that date. Therefore, there is no dispute for allowing the credit on the aforesaid services. The issue of admissibility of CENVAT Credit is covered by the judgment cited by the appellant. 5.3 Regarding the issue whether the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Rules, 2002 by which the service provider can opt not to maintain separate accounts. In such circumstances, what are his obligations In order to understand the same, we are reproducing the Rule 3(5) of Service Tax Credit Rules, 2002 herein below :- (5) In case the service provider opts not to maintain separate accounts of input service meant for consumption in relation to rendering of such output services which are chargeable to service tax as well as exempted services or non-taxable services, he shall be allowed to utilize service tax credit for payment of service tax on any output service only to the extent of an amount not exceeding thirty five percent of the amount of service tax payable on such output service. A careful reading of the above provisions show that when the service provider does not maintain a separate accounts of input service for taxable and non-taxable output service, there is a restriction on utilization of the credit. As per the above rule, the utilization is restricted to 35% of the amount of service tax payable on such output service. At any point of time, the service provider can arrive at his liability which is service tax payable on his out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 42402.92 96249.00 33687.00 96249.00 NIL 33687.00 June 2003 66991.24 119596.00 41859.00 119596.00 NIL 75546.00 July 2003 75512.59 144706.00 50647.00 144706.00 NIL 126193.00 August 2003 126466.82 117150.00 41002.00 117150.00 NIL 167195.00 September 2003 123984.92 126067.00 44123.00 126067.00 NIL 211318.00 October 2003 166697.40 129801.00 45430.00 129801.00 NIL 256748.00 November 2003 158534.49 129097.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
