TMI Blog2023 (4) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... - SUPREME COURT] held that if the credit has been reversed after availing the same, it would mean that credit had not been availed at all - it has to be held that when the entire CENVAT credit availed by the appellant had been reversed, it would amount to non availment of CENVAT credit and the demand for recovery of the CENVAT credit cannot be sustained. Applicability of rule 6 of the Credit Rules - demand on the ground that appellant was producing electricity, which is an exempted product and, therefore, the appellant could not have availed CENVAT credit on common services as the rigours of rule 6 of the Credit Rules would apply - HELD THAT:- When CENVAT credit has been reversed it would amount to non availment of CENVAT credit and, therefore, the confirmation of demand on ground that since the appellant had availed CENVAT credit on services without maintaining separate accounts it would be liable to pay 10%/5%/6% in terms of rule 6(3)(i) of the Credit Rules cannot sustain. The provisions of rule 6(3) of the Credit Rules would apply only when an assessee desires to avail and utilize CENVAT credit pertaining to common input services but as the appellant had reversed the ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected towards forfeiture of security deposit is not towards any service and, therefore, no service tax is payable. Demand of service tax for the period till 30.6.2012 on the ground that such charges were received towards BAS rendered by the appellant - HELD THAT:- The definition of BAS under section 65(19) of the Finance Act includes a variety of activities, but the charges received by the appellant are not towards any of the activities specified is section 65(19) of the Finance Act. The appellant does not promote or market the goods produced or provided by the person paying the same. The appellant also does not promote or market the services rendered by the person paying the same. These charges are not towards any promotional or marketing activities carried out by the appellant. In such a case, these charges are not covered under section 65(19)(i) or 65(19)(ii) of the Finance Act. The appellant does not provide any customer care services on behalf of the person paying the said charges. The appellant does not engage itself in either production/ processing of goods on behalf of such persons or provision of services on their behalf. The appellant also does not procure any goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formed by merging the Rajasthan Energy Development Agency and the Rajasthan State Power Corporation Ltd., is a State Nodal Agency for promoting and developing non-conventional energy sources in the State of Rajasthan and is also a State Designated Agency for enforcement of the provisions of the Energy Conservation Act, 2001. The appellant co-ordinates the programme activities regarding non-conventional energy sources and is also engaged in creating awareness among people towards conservation of energy, protection of environment degradation through demonstration projects and other methods. To reduce the dependence on conventional sources of energy by promoting the development of non-conventional energy sources, the appellant works as a nodal agency for promotion and development of renewable energy sources under different policies issued by the Energy Department in the Government of Rajasthan. 4. In September 2013, the Audit team of the Service Tax Department conducted an audit of the appellant and raised multiple demands for recovery of service tax and CENVAT credit. The department sent a letter dated 28.10.2013 to the appellant reiterating the audit objections and advised the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eclaration. Thus, as the provisions of the Voluntary 2013 Scheme had been contravened, the declaration was liable to be rejected. The show cause notice also sought to recover the amount already proposed to be recovered in the earlier show cause notice dated 24.04.2014. The appellant filed a reply dated 31.12.2014. 8. The Commissioner, by order dated 22.01.2015, confirmed the demand proposed in the first show cause notice by invoking the extended period of limitation contemplated under section 73(1) of the Finance Act. 9. The second show cause notice was also adjudicated by the Commissioner by order dated 20.05.2016. As the recovery of amount had already been adjudicated, the Commissioner did not adjudicate upon the same in show cause notice and only examined the validity of the declaration made under the Voluntary 2013 Scheme. The Commissioner rejected the declaration finding it to be substantially false . 10. Service Tax Appeal No. 51569 of 2015 has been filed to assail the order dated 22.01.2015 passed by the Commissioner and Service Tax Appeal No. 52471 of 2016 has been filed to assail the order dated 20.05.2016 passed by the Commissioner. 11. The issues involve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period was not invokable and interest was not recoverable nor penalty was imposable. 14. Shri Rajeev Kapoor, learned authorized representative appearing for the Department supported the impugned order passed by the Commissioner. 15. Learned counsel for the appellant very fairly stated that if Service Tax Appeal No. 51569 of 2015 succeeds, then Service Tax Appeal No. 52471 of 2016 relating to the validity of the declaration would be rendered infructuous. 16. It would, therefore, be useful to first examine the submissions made in Service Tax Appeal No. 51569 of 2015 that has been filed to assail the order dated 22.01.2015 passed by the Commissioner confirming the demand proposed in the show cause notice dated 24.04.2014. 17. The first contention advanced by the learned counsel for the appellant is that as the entire CENVAT credit availed by the appellant stood reversed, it would amount to non availment of CENVAT credit. It needs to be noted that the appellant had through three challans paid in cash the amount of CENVAT credit earlier availed by it. The Supreme Court in Chandrapur Magnets Pvt. Ltd held that if the credit has been reversed after availing the same, it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appellant was manufacturing electricity which is an exempted good and, therefore, should have reversed 10%/6%/5% of the value of exempted goods i.e. electricity as the appellant had failed to follow the other options provided under rule 6 of the Credit Rules. The provisions of rule 6 of the Credit Rules show that the same come into picture only when the credit pertains to inputs or input services used in respect of both excisable and exempted product. In terms of rule 2(d) of the Credit Rules, 'exempted goods' can be categorized into three parts as under: (i) Excisable goods which are exempted from the whole of the duty of excise leviable thereon; (ii) Goods which are chargeable to nil rate of duty; and (iii) Goods in respect of which the benefit of an exempted under Notification No. 1/2011-C.E., dated the 1st of March, 2011 or under entries at serial numbers 67 and 128 of Notification No. 12/2012-C.E., dated the 17th March, 2012 is availed. 21. 'Excisable goods' has been defined in section 2(d) of the Central Excise Act, 1944 to mean goods specified in the First Schedule and the Second Schedule to the Central Excise Tariff Act, 1985 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r for lifetime. The appellant received charges in the form of one time accreditation charges for accrediting the applicant for lifetime and in the form of annual accreditation charges for accrediting the applicant for one year. Where a party permitted by the appellant to set up power plants, does not set up the same within the prescribed time period, the security deposit made by such party is forfeited. This amount is shown as 'forfeiture of security deposit' in books of account of the appellant. However, where the project is successfully completed, the said deposit is returned back to the party. The amount collected towards forfeiture of security deposit is not towards any service and, therefore, no service tax is payable. 26. The impugned order has also confirmed the demand of service tax for the period till 30.6.2012 on the ground that such charges were received towards BAS rendered by the appellant. The contention of the appellant is that these charges are not towards BAS deserves to be accepted. The definition of BAS under section 65(19) of the Finance Act includes a variety of activities, but the charges received by the appellant are not towards any of the activiti ..... 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