TaxTMI 
TaxTMI 
2022 (11) TMI 561
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....udice to any other action that may be taken under the provisions of the Finance Act, 1994 and the rules framed there under or any other law for the time being in force in the Republic of India." 2.1 Respondent is service provider providing taxable service classifiable under the category of construction of residential complex service. Prior to 01.07.2010, a developer getting construction done from a contractor was exempted from service tax and was not allowed to raise credit under the Cenvat Credit Rules, 2004. From 01.07.2010 to 30.06.2012, a developer was allowed to pay service tax after availing abatement of 75%, provided no Cenvat credit is availed. Post 01.07.2012, a developer was allowed Cenvat credit only of input services and capital goods (not inputs) with abatement of 75%. 2.2 During the course of audit, it was observed that the respondent was having Cenvat credit balance of Rs.3,39,72,291/- in the Cenvat credit account. Thus this credit has been availed contrary to the provisions of law as there was no tax on the output services provided by them. During the period 01.07.2010 to 30.06.2012, respondent simultaneously claimed abatement of 75% from the gross value of th....
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....8 of the Finance Act 1994. iv) Penalty for contravention of provisions of the Finance Act 1994 and the rules made thereunder as discussed above should not be imposed on them under provisions of Section 77 of the Finance Act 1994. v) The CENVAT credit availed for the period prior to 01/7/2010 amounting to Rs 3,39,72,291/- should not be recovered from them under provisions of Rule 14 of the CCR,2004 read with proviso to Section 73 of Chapter V of the Finance Act 1994. The amounts equal to the said inadmissible credit reversed by MLDL as stated in para 2.3 above should not be appropriated against the said liability.. vi) Interest on the said inadmissible CENVAT credit should not be recovered from them under the provisions of Rule 14 of the CCR, 2004 read with Section 75 of Chapter V of the Finance Act, 1994. vii) Penalty should not be imposed upon them for availment of said inadmissible CENVAT credit under the provisions of Rule 15 (3) of the CCR, 2004 read with Section 78 of Chapter V of the Finance Act, 1994." 2.5 This show cause notice has been adjudicated by the Principal Commissioner as per the impugned order referred in para 1 above. Aggrie....
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....ed (hereinafter referred to as the said notification') stipulates that this notification shall not apply in cases where: (i) The Cenvat credit on duty on inputs or Capital goods or the Cenvat credit of Service Tax on inputs services, used for providing such taxable service has been taken under the provisions of the Cenvat Credit Rules, 2004 or; (ii) The service provider has availed the benefit under the Notification of the Govt. of India in the Ministry of Finance (Department of Revenue) No. 12/2003-Service Tax dated 20th June 2003 (G.S.R. 503(E) dated 20.06.2003). 14.00 On scrutiny of the ST-3 returns it was revealed that they had availed abatement as envisaged in the said notification. Further, it was observed that Noticee, in the instant case, had violated the first condition of the said notification by taking the Cenvat credit on the capital goods and input services (which are common) and had not maintained separate accounts for the same as envisaged in Rule 6(2) of the Cenvat Credit Rules, 2004. It was further observed that the Cenvat credit availed on input services cannot be attributed to any specific output services provided by the Noticee. Th....
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....t services as well as payment of service tax on abated value as per Notification No.1/2006 without maintaining separate record, abatement was denied and Service Tax is demanded on gross value. On being pointed out during the course of audit of the Noticee, they have reversed the Cenvat credit. The matter of dispute in this case, is about whether the Noticee is disentitled benefit of abatement under Notification No.1/2006 dated 01.03.2006 and to the thereby liable to pay differential Service Tax of Rs.4,50,79,517/- even then reversal of the Cenvat credit of Rs.4,55,39,305/-, merely because they availed Cenvat credit. 17.00 By a impugned show cause notice, the abatement availed by the Noticee as per the Notification No.1/2006 dated 01.03.2006 has been denied due to availment of Cenvat credit on inputs, input services and demanded differential Service Tax for the period prior to 01.07.2010 and from 01.07.2010 to 30.06.2012 under proviso to Section 73(1) of the Act. This was pointed out during the course of Audit of the department. On being pointed out the Noticee had reversed the entire Cenvat credit availed for wrong availment of Cenvat credit. The Noticee strongly denied th....
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....nce CENVAT credit availed on common inputs/ services are reversed, is considered as good as nonavailment of CENVAT credit. The adjudicating authority sought to distinguish the case law cited before him only on the ground that the case laws were in respect of 'inputs' and not 'input services'. We do not agree with the findings recorded by the adjudicating authority. In the case of Hindustan Construction Co. Ltd. Vs. Commissioner of Service Tax 2014-TIOL-18209-CESTAT-MUM this bench has taken a similar view on a more or less identical issue and held that once the assessee has reversed the CENVAT credit taken, benefit of Notification No. 1/2006-ST cannot be denied. Respectfully, following the said ruling, we set aside the impugned order and allow the appeal filed by the appellant is, upholding the reversal of CENVAT credit by the appellant along with interest." 19.00 Hon'ble CESTAT in M/s. Hindustan Construction Co Ltd. Vs Commissioner of Service Tax Mumbai-II [2014-TIOL-1820- CESTAT-MUM], has held as under: "6. As regards the demand of service tax for the period on or after 1.6.2007, the activity is liable to service tax under 'works contract ....
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....tter is as to whether the Respondent was disentitled to the benefit of abatement under Notification No. 1/06-ST and thereby liable to pay differential service tax of Rs. 57,547/-, merely because they availed Cenvat credit amounting to Rs. 1198/- simultaneously with such abatement benefit for the month of March 2006 (the month during which for the first time, the condition of non availment of Cenvat credit of service tax paid on input service was introduced.. 4. Commissioner(Appeals) by taking note of the Hon'ble Supreme Court's judgment in the case of Chandrapur Magnet Wires Pvt. Ltd. Vs. CCE, reported in 1996(81)E.L.T.3 (S.C.) as also by taking note of the Hon'ble Allahabad High Court's judgment in the case of Hello Minerals Water (P) Ltd., Vs. UOI reported in 2004 (174) E.L.T. 422 (All) has held in favour of the assessee. In as much as the respondents have admittedly reversed the credit, I find no infirmity in the view adopted by Commissioner (Appeals). The appeal filed by the Revenue is accordingly rejected.." 21.00 In view of the above, it reveals that issue involved in the present case is similar to the decision given in the case of M/s.Hindus....