TaxTMI 
TaxTMI 
2022 (7) TMI 719
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.... is directed against the order dated 9^th November, 2021 passed by the Learned Customs, Excise and Service Tax Appellate Tribunal, Kolkata (CESTAT) in service tax appeal No.75642 of 2017. 2. The revenue has raised the following substantial questions of law for consideration: i) Whether in the facts and circumstances of the case the Learned Tribunal is right and justified in setting aside the demand of duty when the respondent/assessee in spite of providing both taxable and exempted service held to maintain separate account as required under Rule 6(2) of the Cenvat Credit Rules and also failed to exercise option as stipulated under Rule 6(3) of the Cenvat Credit Rules, 2004 ? ii) Whether under Rule 6 of the Cenvat Credit....
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....then, the provider of output service shall maintain separate accounts for receipt and use of input/input services. Further, it was pointed that Rule 6(3) of the said Rules, gives liberty not to maintain separate account as prescribed under Rule 6(2), subject to the condition that the assessee pays an amount equal to 6% of value of the exempted services or pay an amount equivalent to the Cenvat Credit attributable to inputs and input services used in or in relation to the manufacture of exempted goods or for provision of exempted service. Further, it was pointed out that under the said scheme, the assessee has to intimate in writing, to the Superintendent of Central Excise and pay provisionally for every month under Rule 6(3A) of the said Ru....
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..../- as per the relevant input service invoices produced by them but they have availed credit to the tune of Rs.66,44,518/- resulting in availment of inadmissible excess credit of Rs.25,27,249/-. The audit party noted that the assessee, on their own volition, well before the audit was undertaken, had reversed Rs.23,45,135/-. Therefore, the assessee was directed to reverse Rs.1,82,114/- and also pay interest and penalty as applicable. The assessee accepted the lapse and voluntarily paid the wrong credit availed by them to the tune of Rs.1,82,114/- along with applicable interest of Rs.1,35,318/- and penalty at the rate of 15% of the tax being Rs.27,317/-. The assessee stated that due to oversight and certain mistake in calculation, they had pai....
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....urn-over based on such figures of all units from where the assessee does not provide any sort of taxable services. That apart, the assessee also questioned the jurisdiction of the assessing officer to invoke Rule 6(2) of the Act. Certain decisions of the High Courts were relied on this aspect. 7. The appellant, while adjudicating the show cause notice, did not agree submissions made by the assessee and rejected the contention that the show cause notice could not have been issued after the final audit report came to be passed. Ultimately, the proposal in the show cause notice was affirmed. Challenging the said order the assessee had preferred appeal before the learned Tribunal. 8. The issue which falls for consideration before the trib....
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....ll be beneficial to take note of the decision of the Hon'ble Supreme Court in Uniworth Textiles Ltd. vs. Commissioner of Central Excise, Raipur 2013 (288) ELT 161 (SC) wherein the Hon'ble Supreme Court held that every non-payment/non-levy of duty does not attract extended period and there must be deliberate default. Further, it was held that the conclusion that mere non-payment of duties is not equivalent to collusion or wilful misstatement or suppression of fact is untenable as the Act contemplates a positive action which betrays a negative intent of wilful default. Further, in Pushpam Pharmaceuticals Co. vs. CCE 1995 (75) ELT 721 (SC) it was held that misstatement or suppression of fact must be wilful since the word 'wilful' precedes the ....
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....ons on behalf of the service provider. As rightly pointed out by Sri S.Ravi, Learned Senior Counsel, if the petitioner does not abide by the provisions of Rule 6(3) of the Cenvat Credit Rules, 2004, it was open to the authorities to reject its claim as regards the disputed Cenvat Credit of Rs. 17,15,489/-." 13. As pointed out in the aforementioned decision, if according to the adjudicating authority, the assessee did not abide by the provisions of Rule 6(3) of the Rules, it was open to the adjudicating authority to reject the assessee's claim as regards the disputed Cenvat Credit and it could not mechanically invoke 6% Rule on the assessee. That apart, the tribunal also, on facts, noted that the department mechanically applied 6% of the ....