TaxTMI 
TaxTMI 
TaxTMI 
2018 (9) TMI 922
X X X X Extracts X X X X
X X X X Extracts X X X X
....shall not be allowed on such quantity of inputs service which is used in the provision of exempted services except in the circumstances mentioned in Rule 6(2). As per Rule 6(2), the provider of output service avails CENVAT credit in respect of any input service and provides such output services which are chargeable to tax as well as exempted services. The provider of output service shall maintain separate accounts for receipts, consumption and inventory of input service meant for use in providing output service and take CENVAT credit only on that quantity of input service which is intended for use in providing output service on which service tax is payable; Rule 6(3) provides that a provider of output service, opting not to maintain separate accounts, shall either pay an amount equal to 6% of the value of the exempted services or shall pay an amount equivalent to CENVAT credit attributable to input services used in or in relation for provision of exempted services subject to the conditions of procedure specified therein in sub-rule (3A). 2.1 The Department contended that the appellants have not maintained separate records during the period 2006-07 to 2011-12. Accordingly, the foll....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d.: 2009 (244) ELT 399 (Tri.Kol.) 3.1 The learned Commissioner was required to ascertain whether the appellant was maintaining separate accounts in substantiating compliance with the requirement of Rule 6(2) of CENVAT Credit Rules as held in Kaleesuwari Refinery Pvt. Ltd.: 2007 (220) ELT 335. The impugned order did not deal with the totality of evidences provided by the applicant to substantiate that they maintained separate accounts in terms of Rule 6(2) of CENVAT Credit Rules. The appellants submitted that they have been reversed the credit at the end of the month and as held by the Hon'ble Supreme Court in the case of Chandrapur Magnet Wires Pvt. Ltd.: 1996 (81) ELT 3 (SC) credit reversed is as good as credit not taken. The appellants submitted that they have exercised option to maintain separate accounts. 3.2 As regards input services used in the provision of output services taxable as well as exempted as required under Rule 6(1) of (2) of CENVAT Credit Rules, the applicant cannot be directed to follow the provisions of Rule 6(3) of CENVAT Credit Rules. They placed reliance on Magtech Mobilespares Pvt. Ltd.: 2006 (205) ELT 481 (Tri.-Mum.) and PSL Ltd. vs. CCE, Pondicherry: 20....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hartered Accountant certifying maintenance of CENVAT credit records and procedure adopted for bifurcation of input credit used for taxable and exempted services and reversal of CENVAT credit at the end of the month in respect of the exempted services. 4.4 In respect of the above show-cause notice No.164/2012-ST in appeal No.ST/21676/2014, the learned Commissioner has got confirmed the maintenance of separate accounts by the appellants. The learned Commissioner sought a clarification from the Jurisdictional Range Officer who has furnished a reply vide letter dated 26.11.2013 confirming the below: a) The assessee is maintaining private accounts for CENVAT credit in their system. b) They are not availing/utilizing any CENVAT Credit on input services exclusively meant for exempted services. c) In their private accounts, they avail of the full amount of CENVAT credit and then subtract the whole credit on indirect expenses which are common for taxable and exempted services. d) Only the net amount is shown in the ST-3 Returns as credit availed. e) In their private accounts, the assessee has shown an amount of Rs. 18,85,143/- as input service credit in respect of advertisement c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....it on services which are used wholly in taxable services as direct credit and the credit used in exempted services is being written off in the Profit and Loss Account. In case of input services which are used in taxable as well as exempted services, they are making the reversals at the end of the month. In view of the above, it is evident that appellants have maintained separate records as required under CENVAT Credit Rules. They have produced Chartered Accountant certificates before the learned Commissioner, however, out of above five appeals, only in one case the Commissioner has caused a factual enquiry and has stopped the proceedings. It is not understood as to why such an enquiry was not conducted in respect of other show-cause notices. Understandably, the appellants are a big entity spread over different countries and different places in India as there is no prescribed manner for maintenance of records under CENVAT Credit Rules, the records maintained by the appellants have to be accepted as records for the purpose of observing the conditions of CENVAT Credit Rules. Moreover, we find that the Chartered Accountant has given a categorical certificate that the appellants are mai....