TMI Blog2018 (8) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... re used exclusively for output service which is exempted or not liable to payment of service tax - In the present case, it cannot be stated that the construction service of painting has been used exclusively for rendering exempted service and hence the demand for reversal is not justified. In addition, it is seen from the record that the appellant has been proportionately reversing the credit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pur for painting and polishing work carried out in the Hotel. The department denied such cenvat credit on the ground that the hotel rooms were exempted from service tax during the relevant period and hence the lower authorities ordered for reversal of the credit. Aggrieved by the decision, the present appeal has been filed. 2. With the above background, we heard Shri Ajay Agarwal, ld. Advocate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vat Credit Rules, 2004, the appellant has already reversed proportionate cenvat credit for using input services for exempted as well as taxable services. Hence, he submitted that there is no need for reversal of the entire cenvat credit availed. (iv) Lastly, he submitted that the demand itself is time barred inasmuch as the appellant accounts were being periodically audited and such discrepancy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of painting has been used exclusively for rendering exempted service and hence the demand for reversal is not justified. 6. In addition, it is seen from the record that the appellant has been proportionately reversing the credit on inputs/ input service as per Rule 6(3) of the Cenvat Credit Rules, 2004. We are of the view that such proportionate reversal takes care of the situation wherein i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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