TaxTMI 
TaxTMI 
TaxTMI 
2018 (12) TMI 244
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....ing under Chapter sub heading 3904 2210 and 3204 9000 of CETA, 1985 and are availing the facility of CENVAT credit under CENVAT Credit Rules, 2004. During the course of audit of the unit, it was noticed that the appellants are undertaking job work of PU coating on fabrics and collecting amounts towards job work charges. The job work activity is covered under exempted category and attracted Nil rate of service tax. They were also engaged in trading activity. It was noticed that the appellant availed CENVAT credit on service tax bills on common input services like security service, GTA service and Manpower Service which were used in the manufacture of excisable goods as well as in the provision of exempted service viz., job work and also sale....
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....but dropped the demand of Rs. 81,956/- being 6% of an amount of job work charges. Aggrieved by the said order, appellant filed appeal before the Commissioner (A) who rejected the same. 3. Heard both the parties and perused the records. 4. Learned counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without properly appreciating the facts and the law and binding judicial precedent. He further submitted that the appellants have already reversed proportionate credit of Rs. 57,230/- along with interest of Rs. 11,188/- on 13.5.2015 i.e., before issuance of show-cause notice and hence, the question of demand of an amount at the rate of 6% of the value of the exempted goods on the grou....
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.... 6(3A) as held in various decisions cited supra. Further Division Bench of this Tribunal in the case of Cranes & Structural Engineers (supra) has held in para 4 and 4.1 as under: "4. I have heard both the parties and perused the records. Rule 6 of CCR, 2004 speaks about the obligation of manufacturer of dutiable and exempted goods and provider of taxable and exempted services. Clause (i) of Rule 6(3) states that Cenvat credit shall not be allowed on such quantity of input or input services which is used in the manufacture of exempted goods or for providing exempted services. Clause (ii) of Rule 6(3) states that in case the manufacturer or service provider uses common inputs/input services then such manufacturer or service provider has to m....
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....ellant is bound to pay the duty amount calculating under the first option. According to me, this argument is devoid of merit, because the said Rule does not say anywhere that on failure to intimate, the manufacturer/service provider would lose his right to avail second option of reversing the proportionate credit. Sub-rule (3A) of Rule 6 is only a procedure contemplated for application of Rule 6(3). Consequently, the argument of Revenue is that the appellants exercising option is mandatory and on its failure, the appellant has no other option but to accept and apply Rule 6(3)(i) and make payment of 5%/10% of the sale price of the exempted goods or exempted services is not acceptable, because the Rule does not lay down any such restriction a....