TaxTMI 
TaxTMI 
2018 (12) TMI 426
X X X X Extracts X X X X
X X X X Extracts X X X X
....ellant availed CENVAT credit of common input services as also input services and inputs; had not availed CENVAT credit of service tax paid on services utilised for exempted services and reversed the CENVAT credit attributable to trade activity based upon the turnover as provided under Rule 6(2) of Cenvat Credit Rules, 2004. It is the case of Revenue that appellant having not maintained separate accounts for the input services used for taxable and non-taxable services, is required to pay an amount as provided under Rule 6(3A) of CCR 2004. Appellant in his reply to the show cause notice pointed out that they had in fact availed CENVAT credit of the common input services attributable to the taxable services and had not availed the CENVAT credi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....le 6(2). Further, it is his submission that the demands are hit by limitation as the extended period is invoked for demanding ineligible CENVAT credit and that during the period in question, appellants filed returns with the authorities regularly and audit has taken place and the decision of the Tribunal in the case of Sanjay Automobile Engineering Pvt. Ltd. is on the same issue wherein the Tribunal took a view that if one audit is carried out then the extended period cannot be invoked. It is his further submission that the department has been conducting EA 2000 audits every year without break and in none of the audits this anomaly which is said to be pointed out, was indicated. 4. Ld. DR on the other hand submits that the provisions of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... services, except in the circumstances mentioned in sub-rule(2). Provided that the CENVAT credit on inputs shall not be denied to job worker referred to in rule 12AA of the Central Excise Rules, 2002, on the ground that the said inputs are used in the manufacture of goods cleared without payment of duty under the provisions of that rule. 6(2) Where a manufacturer or provider of output service avails of CENVAT credit in respect of any inputs or input services, and manufactures such final products or provides such output service which are chargeable to duty or tax as well as exempted goods or services, then, the manufacturer or provider of output service shall maintain separate accounts for receipt, consumption and inventory of input an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....heir internal accounting purposes regarding the credit to be availed in respect of services rendered. They are taking the credit 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 st....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed by the department in Table-C. 9. A bare reading of sub-rule (2) and sub-rule (3) of the CCR 2004 makes clear that sub-rule (3) contains overriding provision which is independent in its nature irrespective of anything stated in sub-rule (1) and sub-rule (2) of CCR 2004. When sub-rule (2) is read that throws light that appellant has chosen a way of maintaining its record which enabled it to substantially allocate the cenvat credit of service tax suffered by the departments in Table-C and partly to the department in Table-B. It has complied to the provisions of sub-rule (2) of Rule 6. Once the conduct of the appellant in the manner indicated by the material facts stated above is very clear because of the proportionality of the credits al....