TaxTMI 
TaxTMI 
2018 (1) TMI 254
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....o 1.4.2011, the trading activity was not exempted service as the same was brought under the definition of "exempted service" w.e.f. 1.4.2011. Therefore, there is no requirement of payment of 5% of the value of traded goods in terms of Rule 6(3)(i) for the period prior to 1.4.2011. The appellant followed the same practice subsequent to 1.4.2011 and continued it till March, 2014. During audit of record of the appellant, it was pointed out that against the availment of CENVAT Credit on input services attributed to exempted input service, the appellant was required to pay 5% of the value of the traded goods. It is his submissions that there is option available to the appellant either to pay 5% in terms of Rule 6(3)(ii) or proportionate credit attributed to the trading activity. They claimed an option of Rule 6(3)(ii), which was rejected by the Commissioner and demanded 5% of entire trading turnover. He submits that when the option is available to the appellant, department cannot insist for a particular option. Accordingly, he concedes that they are liable to reverse the actual credit on service attributed to the trading activity. He has submitted a worksheet, according to which an amou....
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....address and registration No. of the manufacturer of goods or provider of output service; (ii) Date from which the option under this clause is exercised or proposed to be exercised; (iii) Description of dutiable goods or taxable services; (iv) Description of exempted goods or exempted services; (v) Cenvat credit of inputs and input services lying in balance as on the date of exercising the option under this condition. As per the submission of the appellant and perusal of their letter along with enclosed details, it is found that more or less all these particulars were intimated to the Jurisdictional Superintendent. The appellant has been filing their returns regularly on monthly basis to the department. On perusal of the copies of the such return submitted along with appeal papers, it is observed that the particulars, as required under clause (a) of sub-rule (3A) of Rule 6 has been produced to the range superintendent. Therefore all the particulars which are required to be intimated to the Jurisdictional superintendent while exercising option stand produced. Though these particulars have not been submitted specifically under a particular letter, but since these particulars....
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....than Cenvat Credit attributed to the input or input services used in the exempted goods. It is also observed that in either of the three options given in sub-rule (3) of Rule 6, there is no provisions that if the assessee does not opt any of the option at a particular time, then option of payment of 5% will automatically be applied. Therefore we do not understand that when the appellant have categorically by way of their intimation opted for option provided under sub-rule (3)(ii), how Revenue can insist that option (3)(i) under Rule 6 should be followed by the assessee. 5.5 As discussed above and in the facts of the case that actual Cenvat credit attributed to the exempted services used towards sale of the bought out cars in terms of Rule 6(3A) comes to Rs. 4,06,785/- where as adjudicating authority demanded an amount of Rs. 24,71,93,529/-. In our view, any amount, over and above Rs. 4,06,785/- is not the part of the Cenvat Credit, which required to be reversed. The legislator has not enacted any provision by which Cenvat credit, which is other than the credit attributed to input services used in exempted goods or services; can be recovered from the assessee. 5.6 We have gone t....
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....al basis, the value of service being net interest earned less interest paid on deposits, subject to a minimum of 50% of interest paid on deposits. For the non-financial sector it is being proposed that they may reverse credits on gross interest basis. From the above clarification and I also read amendment Notification No.11/2012-S.T., dated 17-3-2012, interest, prior to 17-3-3012 was excluded from the taxable value and thereafter it was explicitly made exempted. Therefore the Board has clarified that after 17-3-2012 the interest of bank loan become exempted and Rule 6(3) was applied. However the Board has clarified that prior to 17-3-2012 the value of interest was not be relevant for the reversal of credit under Rule 6(3) of Cenvat Credit Rules. Moreover for the banking and financial institution under Rule 6(3)(D) the provision was available for straight 50% reversal of interest. In the present case the disputed value is of interest and Cenvat credit up to 50% of credit was required to be reversed. However the appellant admittedly paid the entire Service Tax credit availed by them during the 2008-09 along with interest @ 24% (18% + 6% subsequently) therefore even in view of provi....