TaxTMI 
TaxTMI 
TaxTMI 
2020 (7) TMI 264
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....In response to query appellant further clarified that the input services have been consumed in marketing in pre-sale and support services activities, among others. The summary of input credit availed/utilized was filed along with the rebate claim. The appellant was also engaged in trading and they were following the procedure prescribed under Rule 6(3A) of Cenvat Credit Rules, to determine the ineligible cenvat credit attributable to exempted services. It appeared to Revenue that while calculating the percentage of ineligible credit under Rule 6(3A), appellants have not included the amount of cenvat credit availed on Information Technology and Software Services (ITSS for short) contending that such ITSS is also a taxable output service, which contention appears to be incorrect. 3. On scrutiny of the ST-3 returns for the financial year 2008-09, the tax liability and its payment appeared as follows: Service rendered Ass value Service Tax Ed Cess She cess Total MRS 131538280 15529995 310600 155300 15995895 CAI 625197180 70910623 1418213 709106 73037942 ITSS (SP) 449303174 53448344....
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.... availed 100% credit both as service provider and service recipient, which is incorrect and the credit so availed is to be restricted to 5% alone. It further appeared that appellants have availed excess credit in respect of other services. 6. It further appeared that the amount of ineligible cenvat credit attributable to exempted services, the appellants should have applied the percentage of ineligible credit, included under Rule 6(3A) of CCR to the credit availed on ITSS also and paid the said amount along with interest as applicable. Further appellants for computation of value of exempted services, i.e. trading in the instant case, have claimed deduction towards ITSS, treating it as taxable output service, without proper justification for the same. Thus it appeared that appellants have failed to adopt the correct formula in arriving at the percentage of ineligible cenvat credit, in terms of Rule 6(3A)(c) of CCR. 7. It further appeared that cenvat credit availed on some of the input services is irregular as follows: (a) Civil Work charges, Commission, Hire charges, Printing Charges, Professional Charges, Rental Charges are not input services under Rule 2(l) of CCR. The payment....
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....f the balance of Rs. 5,21,17,244/- (Rupees Five Crore Twenty One Lakh Seventeen Thousand Two Hundred and Forty Four only) the credit is ineligible as the services do not fall under the purview of 'input services' or the invoices are lacking in one respect or another. Accordingly, show-cause notice dated 23/10/2009 was issued for the period 2008-09 proposing to disallow and recover cenvat credit of Rs. 25,77,02,690/- (Rupees Twenty Five Crore Seventy Seven Lakhs Two Thousand Six Hundred and Ninety only) with interest under Rule 14 of Cenvat Credit Rules and further demand of Rs. 17,06,11,238/- (Rupees Seventeen Crore Six Lakhs Eleven Thousand Two Hundred and Thirty Eight only) was proposed as service tax short paid/not paid, along with interest and penalty was also proposed under Section 78 read with Rule 15(4) of Cenvat Credit Rules. 8. The show-cause notice was adjudicated on contest confirming the disallowance of the cenvat credit of Rs. 25,77,02,690/- (Rupees Twenty Five Crore Seventy Seven Lakhs Two Thousand Six Hundred and Ninety only) with order of appropriation for an amount of Rs. 11,38,10,862/- (Rupees Eleven Crore Thirty Eight Lakhs Ten Thousand Eight Hundred and Sixty T....
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....nly on M/s. Dell India Private Limited under the provisions of Rule 15(4) of the Cenvat Credit Rules read with Section 78 of the Finance Act, 1994 for the irregular service tax credits taken by them and 9.5 Further, taking recourse to Section 80 of the Finance Act, 1994, penalty was not imposed under the provisions of Section 78 of the Finance Act, 1994, for non-payment/short payment of service tax on 'management, maintenance or repair' service, 'erection, commissioning or installation' service, 'information technology software' service and 'business auxiliary' service." Being aggrieved, the appellant is before this Tribunal. 10. The learned counsel for the appellant urges that cenvat credit of service tax paid amounting to Rs. 6,22,33,589/- (Rupees Six Crore Twenty Two Lakhs Thirty Three Thousand Five Hundred and Eighty Nine only) pertaining to various 'common services' used by them for trading and taxable activities, the appellant is eligible for proportionate credit, which bears to the taxable activity and the credit availed is in terms of the Cenvat Credit Rules. 10.1 Further the learned Commissioner have not considered the input credit register submitted with reply to the ....
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....ppellant for availing the cenvat credit. The audit team did not report any material deviation as to details maintained by appellant. Further as regards discrepancies in the invoices in a few instances, the appellants have reversed the credit with interest, under intimation to the Department. In spite of requests made by the appellant to learned Commissioner to provide a list of invoices objected to by Revenue, so as to clarify the objections but no such list was ever provided. The show-cause notice was also silent as to the particulars of invoices which are defective and such allegations are only by way of a vague and passing allegation. 10.6 He further urged that under the facts and circumstances, the appellants have properly followed the provisions of the Service Tax Law with Rules read thereunder and there is no case of any deliberate default, penalties imposed are fit to be set aside. 10.7 Further the appellant relies on the ruling in the case of IBM India Private Limited Vs. CCE, ST & Cus., Bangalore being Appeal No. ST/20741/2014-DB, wherein this Tribunal has held as follows: "2. The learned counsel submits that Cenvat credit has been denied and demanded on the basis of c....
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.... states that on similar allegations for the period 2015-16, the show-cause notice was issued which have been adjudicated vide O-I-O No. 30/2018 dated 28/03/2018 wherein the learned Commissioner have dropped the proceedings following the ruling of this Tribunal in IBM India (Pvt.) Ltd. (supra). Particularly mentioning in para 25.5, that this order in IBM of this Tribunal have been accepted in review by the Department on 03/07/2015. Learned Commissioner also took notice of the Notification No. 13/2016 dated 01/03/2016 where Rule 6 of Cenvat Credit Rules was re-drafted, particularly Rule 6(iii) which is as follows: "(i) No credit of inputs or input services used exclusively in manufacture of exempted goods or for provision of exempted services shall be available; (ii) Full credit of input or input services used exclusively in final products excluding exempted goods or output services excluding exempted services shall be available; (iii) Credit left thereafter is common credit and shall be attributed towards exempted goods and exempted services by multiplying the common credit with the ratio of value of exempted goods manufactured or exempted services provided to the total turnover....