2013 (11) TMI 1080

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....s commercial coaching and training service, information technology service, online information and database retrieval service, for which they were paying service tax and they were also availing the benefit of service tax paid on input services. In April 2008, when they started producing packaged software, the appellant had accumulated credit of more than Rs.2 crores. After starting production of packaged software, the appellants started utilizing the accumulated service tax credit for paying of central excise duty on packaged software entertaining a view that accumulated credits of service tax paid on input services were available to them. It is the contention of the Revenue that there was no relationship between the accumulated credit of s....

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....s and it was accumulated before the commencement of the production of the excisable goods. Therefore the issue becomes one of nexus. At this stage, in view of the fact that there was no one-to-one link between input credit and outputs whether it is service or inputs, the appellant was entitled to a bona fide belief that they are eligible for utilizing the CENVAT credit accumulated for payment of service tax on output service or payment of excise duty on excisable goods. Further, the manufacturer started filing returns from the beginning, which would show that the utilization of accumulated CENVAT credit. In view of the fact that when the manufacture was started for the first time in April 2008 and the ERI returns shows utilization of accumu....