TaxTMI 
TaxTMI 
2020 (11) TMI 82
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....izes in the Amazon warehouse and facilitate dispatch of the goods. In this connection, Amazon was providing BSS and warehousing services. Service tax was collected from the appellants by M/s.Amazon for such services provided to appellant. These are input services for the appellant. As per the Business Promotion Agreement entered with M/s.Amazon, the appellants had to sell different products at the prices fixed by M/s.Amazon through various promotion sales. The profit forgone by the appellants by participating in such promotion sales was compensated by M/s.Amazon. On this compensation received by them being a consideration for declared services as per Section 66E (e) of the Finance Act,1994, the appellants were paying service tax. The appell....
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..... In appeal, the Commissioner (Appeals) held that appellants have to reverse/pay credit along with interest as per Rule 6(3A) (i) @ 7% of the value of exempted services and therefore are eligible for refund of only Rs. 4,31,586/- and appropriate interest. Aggrieved by such order, the appellants are now before this Tribunal. 2. On behalf of the appellant, Ld.counsel Shri G. Natarajan appeared and argued the matter. He submitted that the appellants had not maintained separate accounts of the input services used for exempted services (trading) and taxable output services. Under a wrong advice, reversed the entire input service credit by way of paying cash. On receiving proper legal advice, they filed the refund claims of excess payment made t....
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....e procedural requirement as per the provisions in the CCR, they have to reverse the credit as per Rule 6 (3) (i) and therefore order passed by the Commissioner is legal and proper. 4. Heard both sides. The appeal has been filed for refund of Rs. 49,24,398/. On perusal of the impugned order, we find that the Commissioner (Appeals) has observed as under : "9. It is observed that the value of exempt service as determined by the appellant in view of Rule 6 (3D) (c) is Rs. 11,68,48,502/- (10% of cost of exempt goods sold) on which the amount required to be reversed @ 7% vide Rule 6(3) (i) is Rs. 81,79,395/-. However, the appellant have reversed / paid Rs. 86,10,981/- resulting in excess payment of Rs. 4,31,586/-. 10. It is observed that the....
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....e and clearance of exempted goods. The reason being that there is no tax cascading requiring elimination in such a situation. Therefore, the said Rule 6(1) is clearly not aimed at revenue maximization but credit neutralization. Rule 6(2) and Rule 6(3) of the CCR are only aimed at securing compliance with the substantive provision contained in Rule 6(1) of the CCR where common inputs are used in the manufacture of a dutiable and exempted final product. Reversal of proportionate cenvat credit in respect of the common input used in the manufacture of exempted goods is an option duly permitted under Rule 6(3)(ii) of the CCR itself. Non-compliance with the procedure prescribed under Rule 6(3A) of the CCR does not result in the manufacturer losin....