https://www.taxtmi.com/caselaws?id=386543 The HC allowed the petition challenging imposition of tax and penalty for irregular CENVAT credit availment. The petitioner used inputs/input services for both taxable and exempted output services without maintaining separate records under Rule 6 of CENVAT Credit Rules. The court held that the second respondent arbitrarily exercised powers under provisions meant for assessee's benefit, arriving at unreasonable results while ignoring binding case law. Rule 6(3) merely provides options to service providers not maintaining separate accounts; authorities cannot choose options on behalf of service providers. If petitioner failed to comply with Rule 6(3), authorities could only reject the disputed CENVAT credit claim of Rs. 17,15,489. The court also rejected disallowance of CENVAT credit based on debit notes instead of invoices. Given the arbitrary approach, statutory appeal was deemed unnecessary. en-us Fri, 27 Sep 2019 00:00:00 +0530 Mon, 21 Jul 2025 10:34:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=386543 The HC allowed the petition challenging imposition of tax and penalty for irregular CENVAT credit availment. The petitioner used inputs/input services for both taxable and exempted output services without maintaining separate records under Rule 6 of CENVAT Credit Rules. The court held that the second respondent arbitrarily exercised powers under provisions meant for assessee's benefit, arriving at unreasonable results while ignoring binding case law. Rule 6(3) merely provides options to service providers not maintaining separate accounts; authorities cannot choose options on behalf of service providers. If petitioner failed to comply with Rule 6(3), authorities could only reject the disputed CENVAT credit claim of Rs. 17,15,489. The court also rejected disallowance of CENVAT credit based on debit notes instead of invoices. Given the arbitrary approach, statutory appeal was deemed unnecessary. Case-Laws Service Tax Fri, 27 Sep 2019 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=386543