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TMI Blog2022 (9) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... or the period from July 2009 to March 2010) for 2008-09 to 2009-10 and of Rs.1,16,17,624 for 2010- 11 under section 73 of Finance Act, 1994, along with applicable interest, and penalties imposed under section 78 of Finance Act, 1994 as upheld in order-in-appeal no. NGP/EXCUS/000/APPL/334-335/17- 18 dated 25th September 2017 of Commissioner of GST & Central Excise (Appeals), Nagpur. The dispute pertains to availment of CENVAT credit on 'inputs' and 'input services' used in common for both taxable and exempted services rendered by the appellant herein and is centred around receipt of 'interest' in the course of rendering service that is not liable to tax. Taking of credit by the appellant, under the authority of rule 3 of CENVAT Credit Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 respectively and thereby liable to be subjected to recovery of Rs.68,123, Rs.61,148 and Rs.1,85,783 respectively. For the period thereafter, the recovery of Rs.1,16,06,248 and Rs.76,16,489 at 8% of value of exempted service of Rs.14,50,78,106for 2008-09 and Rs.9,52,06,119for 2009-10 and Rs.1,16,17,624 at 6% of value of exempted service of Rs.19,36,27,064 was ordered. 4. According to Learned Chartered Accountant, appearing for the appellant, it is only by notification no. 11/2012-Service Tax dated 17th March 2012 that 'interest' could be treated as 'exempted' as, till then, 'interest on loans' were merely excluded from the computation of value of taxable service in terms of rule 6(2)(iv) of Service Tax (Determination of Value) Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt was to be charged the appropriate percentage on the value of such 'exempted service' during 2008-09, 2009-10 and 2010-11. In re Bhingar Urban Co-op Bank Ltd, it has been held that '6. As regard the submission of ld. Counsel on the issue whether the interest earned by the bank on loans and advances, whether it is exempted service or taxable service, I read Board Circular DOF No. 334/1/2012/TRU, dated 16 March, 2012 and the relevant paras are reproduced below : Point 20. Rule 6 of Valuation Rules prescribed inclusions and exclusions to the taxable value. Following changes are being made here - i. --------- ii. In sub-rule (2) clause (iv) regarding exclusion of 'interest on loans' is proposed for substitution with "interest on (a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight 50% reversal of interest. In the present case the disputed value is of interest and Cenvat credit up to 50% of credit was required to be reversed. However the appellant admittedly paid the entire Service Tax credit availed by them during the 2008-09 along with interest @ 24% (18% + 6% subsequently) therefore even in view of provisions under Rule 6(3), the appellant could not be asked to pay 8% of the interest amount in terms of Rule 6(3)(ii). I found that during the period involved 2008-09, apart from provisions of Rule 6(3)(i) another option under Rule 6(3)(ii) was available to the appellant according to which the appellant was under obligation to pay an amount equal to Cenvat credit attributable to exempted service subject to certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am of the view that substantial requirement of the amendment is that assessee should pay an amount of Cenvat credit attributable to the exempted services along with 24% interest. Procedure such an application to the Commissioner, is only for the purpose of intimating to the Commissioner regarding the payment. The department has to only ensure the calculation of such credit and payment thereof along with 24% interest. No any further disposal was required at the department's end. Since the appellant discharged the payment of entire services tax credit along with 24% interest their case is squarely covered by the provisions of Retrospective amendment of Rule 6 made under Finance Act, 2010. As regard, reliance placed by the ld. AR in case of Ni ..... X X X X Extracts X X X X X X X X Extracts X X X X
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