2013 (8) TMI 258

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....of assets etc. which activities cannot prima facie be considered as taxable service or exempted service. They avail benefit of Cenvat credit scheme for input services used for all the three activities. The dispute involved in this case is the Cenvat credit to be reversed under Rule 6 of the Cenvat Credit Rules 2004 as the amount attributable to services and activities other than taxable services. 2. Since the applicant has not been able to maintain separate accounts of input services utilized for the three streams of activities, they were required to follow the formula given in rule 6(3A) (c) (ii) of Cenvat Credit Rules, 2004 for final reversal of excess credit taken during the financial year 2010-11. This formula is as under: [the am....

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....-ST dt. 01-03-2006. Revenue is of the view that the entire amount of interest received should form part of the value of exempted service (that is factor 'J'). On the other hand, the applicant is of the view that the entire amount of interest received should be considered as value of (that is factor 'K') taxable service because they pay tax on such services, though tax is paid only on 10% of the interest received. According to them interest cannot be part of the value of service as per Rule 6 (2) (iv) of Service Tax (Determination of Value) Rules, 2006 as it was in fore during the relevant time. 6. Revenue issued a Show Cause Notice dated 27-09-2011 demanding the applicant to reverse Cenvat credit, to the extent it had not been reversed b....

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.... form part of factor 'K' in the calculation. Rest 90% of the interest which represents the true interest on money deployed will not enter in factor 'J' or 'K' while making the calculation for reversal of credit. Only such an approach can be consistent with the rule that interest on loans will not form value of such services; (iv) In the matter of activities like investment in government securities or sale of assets there can be a dispute as to whether these are any type of service at all and if not whether credit of tax paid on services used for such activities can be allowed. A prima facie view was taken that credit cannot be taken on such services. For the purpose of rough calculations for arriving at pre-deposit these may be treated a....