2020 (1) TMI 185

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....e department noticed two discrepancies (i) non-payment of service tax on mobilisation advance received from the client; and (2) irregular availment of CENVAT credit on common input services used for rendering taxable as well as exempted services. Accordingly, a show-cause dated 11.02.2017 was issued to the appellant demanding service tax on the amount of mobilisation advancse which they had received and also an amount under Rule 6(3) of CENVAT Credit Rules 2004 to be recovered under Rule 14 of CENVAT Credit Rules 2004. The show-cause notice also proposed to charge interest on this amount and impose penalties under Section 76, 77 and 78 of the Finance Act 1994. 2. After following due process, the lower authority has confirmed the demand as ....

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....o such inputs and input services used for rendering exempted and taxable services. If one decides not to choose this option, they have to pay an amount as per the formula given in Rule 6(3) read with Rule 6(3A). The demand by the department is made taking into account 6% of the value of exempted services rendered, mainly trading of goods, under Rule 6 (3). He would submit that they have, in fact, submitted before the lower authorities that they have proportionately reversed the amount of CENVAT Credit on the common input services and therefore have complied with the requirement under Rule 6(2) of CENVAT Credit Rules 2004. He therefore prays that the matter may be remanded to the original authority for verification of these facts only. 4. L....