TaxTMI 
TaxTMI 
2007 (6) TMI 459
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....p; Demand of Rs. 13,53,776/- (Service Tax) + Rs. 27,074/- (Ed. Cess) - Total Rs. 13,80,850/- as per Section 73(2) of Finance Act, 1994 (hereinafter referred to as "the said act" for sake of brevity) r/w Rule 14 of Cenvat Credit Rules, 2004 (hereinafter referred to as CCR, 2004 for sake of brevity) 2. Recovery of interest at appropriate rate on the aforesaid confirmed demand from its due date till actual date of payment, in terms of Section 75 of the said act r/w Rule 14 of CCR, 2004. 3. Penalty of Rs. 1000/- under Section 77 of the said Act. M/s. Indian Resort Hotels Limited. 1. Demand of Rs. 12,38,023/- (Service Tax) + Rs. 26,023/- (Ed. Cess) - Total Rs. 12,64,431/- as per Section 73(2) of Fina....
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....ons outside India in terms of Section 68(2) of the said act under the category of services viz. consulting Engineers, architects and interior decorators. The appellants are also availing Cenvat credit facility as envisaged under the said rules. The appellants were found to be providing services of hotel accommodation, restaurant and bar services, which were not taxable services. On scrutiny of the ST3 Returns filed for the period Oct, 05 to March, 06 (filed on 25-4-07) and after inter-action with the officers of the Appellants it was noticed that they had maintained one common account for the input services, which had been used for providing both taxable as wells as non-taxable services and utilized the Cenvat credit to the extent of above....
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....tax, it would be hit by restrictions under Rule 6(2) or Rule 6(3) of the said rules. (ii) The restriction under Rule 6(3)(c) of the said rules is applicable to credit on input services (other than specified in Rule 6(5) of the said rules.) 6. The Appellants have relied upon the following judgments; (1) S.K. Babu v. Sayeda Masarat Begum, (1999) 3 Mh LJ 465 (2) UOI v. G.M.Koli, 1984 Supp SCC 196 (3) Chandavarkar Sita Ratna Rao v. Ashalata S. Guram (1986) SC 447 (4) PEK Kalliani Amma (Smt.) v. K.Devi, (1996) 4 SCC 76 (5) Polyfilms v. CCE, 2006 (198) E.L.T. 3 (S.C.) (6) Ba....
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....tudying the relevant sections, it is seen that in the present case Rule 6(3) is not the relevant rule to be applied since it has been admitted by the department also that the services on which the credit had been taken are amongst 17 services mentioned under Rule 6(5). Once I come to Rule 6(5) the important portion here is the word "not withstanding". The very use of this word means that Rule 6(3) is not applicable for the input services mentioned under Rule 6(5). 11. I then come to the argument of the department that the credit would have been taken but not utilized. I reproduce below the relevant Rule : "Notwithstanding anything contained in sub-rules (1), (2) and (3), credit of the whole of service tax paid on taxable service as s....