TaxTMI 
TaxTMI 
2022 (8) TMI 877
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.... 73 of the Finance Act, 1994; (ii). I confirm the demand amount of Rs. 5,98,82,040/- (Rs. Five Crore Ninety Eight Lakhs Eighty Two Thousand & Forty Only) against the Party under the provisions of sub-rule (3A) to Rule 6 and Rule 14 of the Cenvat Credit Rules, 2004 read with proviso to Section 73(1) of the Finance Act, 1994; (iii). I demand interest at the appropriate rate on the aforesaid amounts, as mentioned against S.No. (i) & (ii) above, under the provisions of Section 75 of the Finance Act, 1994 and; (iv). I impose a penalty of Rs. 6,27,38,707/- (Rs. Six Crores Twenty Seven Lakhs Thirty Eight Thousand Seven Hundred Seven Only) [Rs. 28,56,667/- + Rs. 5,98,82,040/-], on the Party under the provisions of Section 78 of the Finance Act, 1994. 3. The first demand of Rs 28,56,667/- is under rule 6(3)(c) of the CENVAT Credit Rules, 2004 [the Credit Rules]. The second demand of Rs. 5,98,82,040/- is under rule 6(3)(1) of the Credit Rules. The first demand is for the period from April 2006 to March 2008 and is the amount paid in excess of 20% of service tax payable from the credit account, on account of credit of input services used in manufacture of dutiabl....
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....mand of Rs. 5,98,82,040/- under rule 6(3)(1), being 6%/8% of the value of exempted services; 8. The demand for the period from April 2006 to March 2008 has been computed as under: Sl. No. Period Total Service Tax Liability (in Rs) Service Tax paid through Cenvat Credit (Rs.) Service Tax liability @20% to be paid through Cenvat Credit in view of provisions of Rule 6(3)(c) Excess Cenvat Credit utilised beyond the permissible limit of 20% of overall Service Tax liability (in Rs) 1. April, 06 to Sept, 06 24,45,273 24,45,273 4,89,055 19,56,218 2. Sept, 06 to March, 07 3,84,564 3,84,564 76,913 3,07,651 3. April, 07 to Sept, 07 1,17,782 1,17,782 23,556 94,226 4. Oct, 07 to March, 08 6,23,216 6,23,216 1,24,644 4,98,572 TOTAL 35,70,835 35,70,835 35,70,835 35,70,835 9. The demand for the period from April 2008 to March 2011 has been computed as under: Sl. No. Financial Year Value of the exempted services (in Rs.) % of the value of exempted services required to be paid under Rule 6(3)(i) of Credit Rules Amount required to be paid under Rule 6(3)(i) of Credit Rules 1....
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....India Pvt. Ltd. [2021 (11) TMI 899 - CESTAT Bangalore] that the Explanation added with effect from 1.4.2011 is prospective and not retrospective; (iii) In any case, the demand for period 2006 to 2008 does not survive as there was no restriction on availment of credit and was with respect to utilization; (iv) For not exercising the option under rule 6 of Credit Rules by the appellant, the option of payment of 6/8% of trading of goods (exempted service) cannot be thrust upon the appellant. Hence the demand of Rs.5,98,82,040/- is unsustainable. In support of this contention reliance has been placed on the judgment of the Telangana High Court in Tiara Advertising vs. Union of India [2019 (30) GSTL 474 (Telangana)] and the decision of the Tribunal in Agrawal Metal Works Pvt. Ltd. vs. CGST [2022 (7) TMI 924]; (v) The extended period of limitation could not have been invoked in the facts and circumstances of the case; and (vi) The appellant was in any view of matter, only required to pay Rs. 8,40,835/- under rule 6(3A) for period 2008-2011 and payment of such amount would tantamount to full compliance of rule 6(3). 12. Shri B. K. Jain learned aurhori....
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....Credit Rules. 16. The contention of the appellant is that 'trading' was not an exempted service prior to 01.04.2011 since the Explanation to rule 2(e) of the Credit Rules, as amended on 01.04.2011, is not retrospective in nature. 17. Rule 2 of the Credit Rules deals with definitions and rule 2(e) deals with the definition of 'exempted service'. The definition of 'exempted service' has undergone amendments from time to time and the definition as it stood from 2006 to 01.04.2011 and from 01.04.2011 onwards is reproduced below: 2006 to 1.4.2011 "(e) "exempted services" means taxable services which are exempt from the whole of the service tax leviable thereon, and includes services on which no service tax is leviable under section 66 of the Finance Act" 1.4.2011 onwards "(e) "exempted services" means taxable services which are exempt from the whole of the service tax leviable thereon, and includes services on which no service tax is leviable under section 66 of the Finance Act and taxable services whose part of value is exempted on the condition that no credit of inputs and input services, used for providing such taxable service, shall be taken Ex....
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....etrospective effect. We find that the Hon'ble Madras High Court in the case of Ruchika Global Interlinks (supra) have held that inclusion in Explanation to Rule 2(e) "trading" was only clarificatory. It is further observed that the arguing counsels before the Hon'ble Madras High Court did not refer to or relied upon the judgment of Hon'ble Supreme Court in the case of Martin Lottery Agencies Ltd. (supra). Since, the law is well settled by the Hon'ble Apex Court in context with retrospective or prospective operation of the statute, the principles enunciated in the case of Martin Lottery Agencies Ltd. (supra) will be considered as the guiding factor for deciding the issue involved in the present case. 5.6 In view of the above discussions, we do not find any infirmity in the findings recorded in the impugned order, holding that amendment to Rule 2(e) by Notification No. 3/2011-C.E.(N.T.) dated 01.03.2011 will have the prospective effect and cannot be applied retrospectively. Thus, we do not find any merits in the appeal filed by the appellant." (emphasis supplied) 21. The same view was expressed by the Tribunal in Lenovo (India) and the relevant paragraph is reproduced ....