TMI Blog2020 (1) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... been paid by appellant for which credit has been availed - the Bank has accepted the request of assessee for cancellation of loan facility. However, there is no mention that service tax amount has been refunded back to appellant. In fact, it is specifically stated that the arrangement fee collected by the Bank would not be refunded but may be adjusted when other loan facility is made available to appellant in future. Therefore, the observation made by the learned Commissioner for denial of credit that service tax amount has not been paid by appellant is purely on assumption basis. The fact that processing for loan financing has been done by the Bank is not in dispute. Therefore, the Bank has rendered the service of loan processing which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of appellant is registered with Service Tax department for payment of service tax under Reverse Charge Mechanism on various input services and also as an Input Service Distributor ( ISD ) for distribution of input service credit to its various manufacturing units. The appellant has not rendered any output service and therefore not liable to pay output service tax. The appellant is only liable to pay service tax under Reverse Charge Mechanism (RCM) of which credit is availed for payment of output central excise duty on final products. The present proceeding has been initiated for demand of service tax pertaining to their Registered Office in Kolkata. Proceedings were initiated by DGCEI, Kolkata, for enquiry of foreign remit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f CCR 2004 along with interest thereon in respect of services provided by Axis Bank. He however set aside penalty in respect of said amount. (vi) imposed penalty of ₹ 10,000/- each under Section 77(1)(a) and Section 77(1)(d) of the Finance Act 1994. 3. Shri Rajeev Agarwal, Chartered Accountant appeared for the appellant and Shri S.S.Chattopadhyay, Authorized Representative, appeared for the Revenue. 4. The learned Chartered Accountant appearing for the appellant, at the outset, submitted that there are only two issues in respect of which instant appeal has been filed. Firstly, the denial of credit of ₹ 40,17,000/- on services received from Axis Bank and secondly, demand of service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon them under Rule 14 of the Credit Rules. As per the above provision, recovery for wrongful utilisation of credit can be made from a manufacturer or provider of output service only and not an ISD. He relied on the following decisions in support of his contentions: Indian Oil Corporation Ltd. v. CCE., Delhi-II 2014 (35) STR 411 (Tri-Del.) Mahindra and Mahindra v. Commissioner of Service Tax, Mumbai-II (Final Order No. A/85817/2018 dated 21.03.2018) Kansai Nerolac Paints Ltd. v. Commissioner of GST, Mumbai Central in Final Order No. 86095-86096/2018 dated 20.04.2018 Godrej Boyce Mfg. Co. Ltd [2014 TIOL-1188-CESTAT-MUM] On the second issue pertaining to de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it has been availed. We have perused the said letter issued by the Bank which is appearing as Page no. 152 of the appeal book. We find that vide said letter, the Bank has accepted the request of assessee for cancellation of loan facility. However, there is no mention that service tax amount has been refunded back to appellant. In fact, it is specifically stated that the arrangement fee collected by the Bank would not be refunded but may be adjusted when other loan facility is made available to appellant in future. Therefore, we are of the view that the observation made by the learned Commissioner for denial of credit that service tax amount has not been paid by appellant is purely on assumption basis. Moreover, the fact that processing for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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