2022 (4) TMI 200

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....his appeal is as to whether appellants have utilized excess credit i.e. more than the limit prescribed under Rule 3(5) of Service Tax Credit Rules, 2002 (for the period April, 2004 to August, 2004) and Rule 6(3) of the Cenvat Credit Rules, 2004 during the period September, 2004 to September, 2007? 3. It is the case of Revenue that the Appellants are providing both taxable as well as exempted services. The exempted services are 'Renting of server room' and 'ISP to ISP interconnectivity'. During the course of audit it is noticed that the appellant inspite of providing both taxable as well as exempted services, used credit of more than 35% for the period April to 10/09/2004 and more than 20% with effect from 10/09/2004 upto September, 2007 ....

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....f Service Tax Credit Rule and Rule 6(3) CCR 2004 restricts the utilization of credit but does not render the credit inadmissible per se. In support of this submission learned Counsel placed reliance on the circular 137/72/2008-CX.4 dated 21/11/2008 and also on the decision of the Tribunal in the matter of DHL Logistics Private Limited v/s CCE, Thane-II reported in 2015(38) STR 620 (Tri-Mum) and submits that service tax paid by utilizing the credit in excess of the restriction prescribed under Rule 3(5) or Rule 6(3) cannot be demanded. Learned Counsel fairly concedes that both the aforesaid submission were not raised before the lower authorities but since it is a question of law, therefore he is raising it for the first time before the Tribu....

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....Adjudicating Authority is not correct. Not only that, the Adjudicating Authority also recorded the findings that the major portion of the demand is from September, 2004 to March, 2005 (it has been wrongly mentioned as March, 2004 in the order) whereas the assessee has given copies of input tax register from April, 2005, which is completely wrong as the letter dated 17/02/2009 by the appellant to the department specifically mentioned about submission of copies of records maintained by them for the period June, 2003 to January, 2004 and April, 2004 to March, 2005. ST-3 returns for the period April, 2005 to September, 2007 were also submitted by the appellants on 19/05/2009 as demanded by the department vide letter dated 12/05/2009. From the p....