TaxTMI 
TaxTMI 
2021 (3) TMI 1050
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....eptember 2015 Cenvat credit disallowed 1,60,095/- 2. Briefly the facts of the present case are that the appellant is registered with Service Tax and provides taxable services like Event Management Service, Business Exhibition Service, Business Auxiliary Service and are availing credit on eligible inputs and input services in terms of CCR, 2004. In the course of rendering taxable services, appellant is also engaged in the activity of sale of time/space for advertisement in print media and for rendering such services appellant availed cenvat credit on common input services attributable to such services like internet charges, mobile/telephone charges, air fare, taxi hire charges, travelling expenses, server hosting charges, courier charges, stationary etc. as eligible credit in terms of CCR, 2004. Audit was conducted by the Audit Commissionerate for the period October 2011 to September 2015 during July and August 2016 wherein the following discrepancies were noticed- i. It is alleged in the show-cause notice that appellant was engaged in both taxable as well as exempted services and have not maintained separate accounts for availing....
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....ed as an exempted service in terms of Rule 2(e) of CCR, 2004. He also submitted that when the service is not an exempted service, application of Rule 6(2) and Rule 6(3)(i) is itself not proper. Accordingly, appellant availed the common credits. He further submitted that for the purpose of computing reversal of credit, the show-cause notice has computed reversal @6/7% on total credits whereas appellant has never availed credit on inputs directly attributable for the activity of selling of space in print media. He further submitted that both the authorities have wrongly come to the conclusion that the appellant has not maintained separate accounts under Rule 6(2) whereas the fact of the matter is that the appellants for each Division has accounted income and expenditure separately and therefore requirement for maintenance of separate accounts for credit attributed towards taxable, exempted and common credit is complied as per Rule 6(2). He also submitted that because of the maintenance of separate account, it was possible for the appellant to identify credits attributable towards common and taxable services. He further submitted that for the sake of assuming but not admitting that sa....
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....submitted that the allegation of the Department is that the appellant has not availed the benefit of Rule 6(3A) in the beginning of the Financial Year which is only a procedural lapse as was held in the case of Marcedes Benz India (cited supra). He also submitted that as per the revised computation for reversal as per Rule 6(3A), appellant is liable to reverse an amount of Rs. 54,772/- (Rupees Fifty Four Thousand Seven Hundred and Seventy Two only) as per the detailed computation chart attached with the writeen submissions whereas the appellant has already deposited total tax amounting to Rs. 3,53,043/- (Rupees Three Lakhs Fifty Three Thousand and Forty Three only). Learned consultant for the appellant submitted that when the appellant has reversed the credit with interest at the point of audit inquiry, show-cause notice should not have been issued in terms of Section 73(3) of the Finance Act, 1994. For this, he relied upon the decision in the case of CCE Vs. M/s. Adecco Flexion E Workforce Solutions Ltd. - 2012 (26) S.T.R. 3 (Kar.). As far as second issue involved in the present case is whether the appellant is entitled to avail the cenvat credit on input services which has been d....
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....d is towards a flat in Delhi which is used by the employees on their frequent visit to Delhi in connection with execution and management of various exhibitions. He further submitted that when the accommodation bears a direct nexus with the output service, so does the AMC charges and submitted the copies of AMCs and submitted that the cenvat credit has been denied on the ground that the service was provided in unregistered premises. He relied upon the decision of the Karnataka High Court in Mportal India Wireless Solutions Pvt. Ltd. Vs. CST, Bangalore - 2012 (27) S.T.R. 134 (Kar.) wherein it was held that registration with the Department is not a pre-requisite for claiming the credit. Learned counsel also submitted that extended period of limitation has been wrongly invoked because show-cause notice was issued on the basis of departmental audit undertaken for the period October 2011 to September 2015 and all the facts were already within the knowledge of the Department. For this, he relied upon the following decisions: • LANDIS + GYR Ltd. Vs. CCE - 2013 (290) E.L.T. 47 (Tri.-Kolkata) • GAC Shipping India Pvt. Ltd. Vs. CCE - 2017 (49) S.T.R. 242 (Tri.-Bang.)....
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.... only) along with interest of Rs. 41,637/- (Rupees Forty One Thousand Six Hundred and Thirty Seven only) on proportionate common credit and this fact has been noted in para 14.2.6 of the Order-in-Original and once the appellant has reversed the proportionate credit as per Rule 6(3A) of CCR, 2004 then it was not incumbent on the Department to issue a show-cause notice demanding reversal of 6/7% of the exempted turnover. Further, I find that it has been consistently held by the Tribunal in various decisions cited supra that Rule 6(3) clearly gives an option and it is for the manufacturer/service provider to make a choice and not intimating the Department regarding the choice is only a procedural lapse which will not defeat the substantive right of the appellant to avail the option provided under Rule 6(3). I also find that as per the revised computation for reversal as per Rule 6(3A), appellant was only liable to reverse an amount of Rs. 54,772/- (Rupees Fifty Four Thousand Seven Hundred and Seventy Two only) whereas he had already reversed during the audit Rs. 60,672/- (Rupees Sixty Thousand Six Hundred and Seventy Two only) along with interest. In view of the above discussion, with....