AI Drafter 
TaxTMI 
TaxTMI 
2019 (10) TMI 539
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng charges on non-taxable services including rental from junction links, inter-connection link charges, port charges, infrastructure charges etc., and have not given any intimation regarding maintenance of separate accounts for input services for the taxable and exempted services. As per Rule 6(3)(c) of CCR, 2004 the provider of output service providing both taxable and exempted services who has opted not to maintain separate accounts of receipt, consumption and inventory of input and input service meant for use in providing output service shall utilize CENVAT credit to the extent of an amount not exceeding twenty per cent of the amount of Service Tax payable on the taxable output service. It is alleged that during the period March 2005 and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vices. This Rule does not, in any way, indicate that they have to maintain separate records for capital goods used in providing exempted and taxable services. Therefore, the limit laid down in Rule 6 (3) (c) of twenty per cent of CENVAT credit towards payment of Service Tax applies only to the CENVAT credit availed on the inputs/input services. He agrees that they have not maintained separate records of inputs/input services used in providing exempted and taxable services therefore the limitation under Rule 6(3)(c) applies to them. They have not utilized CENVAT credit of input or input services in excess of twenty per cent of the Service Tax paid during the relevant period. However, in the SCN, the Department has erroneously taken CENVAT cr....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... these 17 services for placing them under sub-rule (5) they have been placed in a separate sub-rule [i.e. sub-rule (5)] because in respect of utilization of credit of tax paid on these services, the restriction of 20% does not apply, while the restriction applies in all other cases. In conclusion the credit taken in respect of the services can be utilized for payment of service tax without any limit." 4. He would submit that it is very clear from the aforesaid Circular of CBEC that the limit of twenty per cent applies only to the CENVAT credit availed on inputs and input services and not to the capital goods credit. He further relies on the case laws of Idea Cellular Ltd. Vs Commissioner of Central Excise, Rohtak [2009 (16) STR 712 (Tri.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on too, a presumption cannot be considered as an aid, or a tool for interpretation. 11. When the non obstante clause of 'Not withstanding anything contained in... was introduced and credit allowed for inputs, capital goods and input services, for discharging Service Tax liability as stipulated under Rule 6(3)(c), it appears, the meaning of credit need not be read as it appears in Rule 6(2). It need not be restricted to the credit of inputs or input services. Further, in the absence of any specific exclusion to any specific credit, it appears to be proper and just to understand the meaning of CENVAT credit as inclusive of all credits. Thus, excluding any specific credit, credit of capital goods, is unintended by Rule and hence the r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aid amount, it shall be recovered along with interest in the same manner, as provided in Rule 14, for recovery of CENVAT credit wrongly taken. It is the view of the Learned Commissioner that in the absence of any specific restriction, Rule 6(3) (c) applies to the entire CENVAT credit and not just to the CENVAT credit on inputs/input services. 8. We find that this issue is no longer res integra and it has been decided by the Principal Bench of the Tribunal in the case of Idea Cellular Ltd. (supra) and by the Allahabad Bench of the Tribunal in the case of BSNL (supra) that the twenty per cent restriction in Rule 6(3) (c) applies only to the credit on inputs/input services and not to the credit on capital goods. 9. However, in the abs....