2008 (5) TMI 165

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....lant. Shri A.P.S. Suri, JCDR, for the Respondent. [Order per : Justice S.N. Jha, President]. - Dispute in this appeal relates to utilization of service tax credit as per Rule 3(3) in excess of 35% of the amount of service tax payable on the output service as provided in Rule 3(5) of the erstwhile Service Tax Credit Rules 2002. The case of the appellant is that the restriction of 35% provided....

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....t is also the case of the appellant that there being no suppression of facts, misstatement etc., the extended period of limitation could not be applied and, therefore, the show cause notice issued on 21-8-2006 for the period from May 2003 to August 2004 should have been dropped. 2. On behalf of the Revenue, it was submitted by the learned DR that the service provided by the appellant was interc....

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....ain a separate accounts of input service for taxable and non-taxable output service, there is a restriction on utilization of the credit. As per the above rule, the utilization is restricted to 35% of the amount of service tax payable on such output service. At any point of time, the service provider can arrive at his liability which is service tax payable on his output service. He should calculat....

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....e credit comes to Rs. 4,94,494/-. This is actually equal to 35% of their liability from May 2003 to March 2004. There is no rule which says that the credit accumulated during the month should be used in the same month. In fact no time frame has been fixed in the rules". 4. The learned DR reiterated that in the absence of any provision to the contrary in the Rules, the liability has to be worked....