TMI Blog2020 (12) TMI 806X X X X Extracts X X X X X X X X Extracts X X X X ..... will not have any application, when a credit is taken wrongly and the same is reversed as it tantamount to nonavailment of the credit. Appeal allowed - decided in favor of appellant. - Service Tax Appeal No. 75460 of 2018 - FINAL ORDER NO. 75653/2020 - Dated:- 10-11-2020 - SHRI P.K.CHOUDHARY, MEMBER(JUDICIAL) Shri Ankit Kanodia, Chartered Accountant for the Appellant (s) Shri Joydip Chattopadhyay, Authorized Representative for the Respondent (s) ORDER The appellant assessee is in appeal against the Order-in-Appeal dated 31/10/2017 wherein demand of CENVAT credit reversal amounting to ₹ 32,40,001/- under Rule 6(3) of the Cenvat Credit Rules, 2004 on account of provision of exempted services and provision of taxable service was confirmed by the Commissioner(Appeals) for the period from 2010-11 to 2013-2014. 2. Briefly stated, the facts of the case are that the appellant, M/s.Mould Equipment Limited, is engaged in the business of manufacture of moulds as well as repair and maintenance and job work services and is registered with the Service Tax as well as the Central Excise department.They are also engaged as job worker by M/s. Hindustan National ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of ₹ 3,25,737/- as per calculations below and thus there is no question of demanding 5%/6% of exempted turnover for reversal of Cenvat credit. MOULD EQUIPMENT PRIVATE LIMITED Particulars 2010-2011 2011-2012 2012-2013 2013-2014 Total Total Credit As per ST-3 55,763 140548 1,47,070 1,43,870 4,87,251 Taxable Turnover- Maintenance Repair Service 14,56,526 46,08,384 53,76,646 55,58,915 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The learned Chartered Accountant also submits that it is not provided under the law that if there is any procedure infraction in availing the option of Rule 6(3)(ii), the option provided under Rule 6(3) (i) shall automatically apply. Two options have been provided under the law to the assessee. It is a choice available to the assessee to exercise the option to be availed. In the present case, the appellant admittedly availed option available under rule 6(3)(ii) read with rule 6(3A), therefore Revenue cannot insist to avail the option of Rule 6(3)(i) and demand huge amount of money which is otherwise not payable by the appellant, nor it is part of Cenvat Credit availed by the Appellant. He submits that when the options have been provided, the department has no say for choice of the assessee, the assessee has liberty to choose any of the option and therefore in the appellant s case, the appellant has opted for option available under rule 6(3)(ii) of Cenvat Credit Rules, therefore the department has no role to decide regarding any other option available in these rules. 9. In support of his submissions, the Learned. Chartered Accountant has referred to the following judgments: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relation to the manufacture of dutiable final products excluding exempted goods; (iii) for the provision of exempted services; (iv) for the provision of output services excluding exempted services; and (b) the receipt and use of input services - (i) in or in relation to the manufacture of exempted goods and their clearance upto the place of removal; (ii) in or in relation to the manufacture of dutiable final products, excluding exempted goods, and their clearance upto the place of removal; (iii) for the provision of exempted services; and (iv) for the provision of output services excluding exempted services, and shall take CENVAT credit only on inputs under sub-clauses (ii) and (iv) of clause (a) and input services under sub-clauses (ii) and (iv) of clause (b).] Notwithstanding anything contained in [(3) sub-rules (1) and (2), the manufacturer of goods or the provider of output service, opting not to maintain separate accounts, shall follow [any one] of the following options, as applicable to him, namely :- [(i) pay an amount equal to [six per cent.] of value of the exempted goods and exempted services; or (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-rule (3A). When the mistake was pointed, the appellant reversed the proportionate common credit taken on input services used in the provision of exempt services. Therefore, Rule 6(3) (i) will not have any application, when a credit is taken wrongly and the same is reversed as it tantamount to nonavailment of the credit. 14. I find that the Tribunal in the case of M/s MERCEDES BENZ INDIA (P) LIMITED VS COMMISSIONER OF CENTRAL EXCISE, PUNE-I 2015-TIOL-1550-CESTAT-MUM while dealing with a similar situation has held 5.4 We find that the appellant admittedly paid an amount of ₹ 4 ,06,785 /plus interest, this is not under dispute. Therefore in our view, the appellant have complied with the condition prescribed under Rule 6(3)(ii) read with sub rule (3A) of Rule 6 of Cenvat Credit Rules, therefore demand of huge amount of ₹ 24,71,93,529/of the total value of the vehicle amounting to ₹ 494,38,70,577/sold in the market cannot be demanded. We are also of the view that Rule 6 of the Cenvat Credit Rules is not enacted to extract illegal amount from the assessee. The main objective of the Rule 6 is to ensure that the assessee should not avail the Cenvat Credit in res ..... X X X X Extracts X X X X X X X X Extracts X X X X
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