TaxTMI 
TaxTMI 
2023 (5) TMI 760
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....d by them against the demand confirmed 3) I order recovery of interest at the applicable rate in terms of Rule 6(3A)(e) of the Cenvat Credit Rules, 2004 read with Rule 14 of the Cenvat Credit Rules, 2004 4) I impose penalty of Rs.81,012/- (Rupees Eighty one thousand and Twelve only) under Section 76(1) of the Finance Act, 1994 read with Rule 15(1) of the Cenvat Credit Rules, 2004." 2.1 During financial year 2015-16 appellant was providing exempted services viz. handling and transportation of exempted goods, auction/sale of unclaimed goods and ocean freight. They were also providing taxable services on which service tax was paid. Appellant has availed Cenvat credit on input services and capital goods used for providing both taxable and exempted services. So, they were required to pay an amount determined in terms of Rule 6(3A) of Cenvat Credit Rules, 2004. 2.2 Appellant had paid the amount determined in terms of Rule 6(3A) by taking into account the Cenvat credit taken on common input services used for providing both taxable and exempted services instead of taking total Cenvat credit availed on input services during financial year 2015-16. Revenue was of the ....
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....(Tri.-Mumbai)] IBM India Pvt. Ltd. [Final order No. 20300/2015 dated 11.02.2015] Eicher Tractors [2000 (116) ELT 712 (T)] Sify Technologies Ltd. [2014-TIOL-60-CESTAT-MAD] Chennai Petroleum Corporation Ltd. [2014 (35) STR 169 (Commr. Appl.)] Amendment made in Cenvat Credit Rules, 2016 also requires that reversal should be done only on credit pertaining to common input services and the said amendment is retrospective in nature. In case of Reliance Industries Ltd. [2019-TIOL-1593-CESTAT-AHM] it has been held that amended provisions are having retrospective effect. He would further rely upon the following decisions:- E-connect Solutions Pvt. Ltd. [2021 (376) ELT 678 (Tri.-New Delhi)] Honda Cars India Ltd. [2021 (2) TMI 948 - Tri.-New Delhi] Dell International Services India Pvt. Ltd. [2020 (7) TMI 264 - Tri.-Bangalore] IBM India Pvt. Ltd. [Final order No. 20300/2015 dated 11.02.2015] IPCA Laboratories Ltd. [2015 (40) STR 771 (Tri.-Del.)] Foods, Fats & Fertilisers Ltd. [2009 (247) ELT 209 (Tri.- Bang.)] Mercedes Benz India (P) Ltd. [2015 (40) STR 381 (Tri.- Mumbai)] Ocean....
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....law is that the appellate authority is not empowered to raise any fresh issue for the first time, which was not proposed in the show cause notice. Further, I also find that for consideration of the prescribed formula, the learned Commissioner (Appeals) has not specifically issued any notice to the appellantassessee for the defence submissions. Hence, I am of the considered view that consideration of altogether a new ground in the impugned order cannot be sustained for judicial scrutiny and accordingly, the appeal of the appellant-assessee should succeed on such ground.' Learned Chartered Accountant contended, on behalf of the appellant, that the initiation of proceedings for ineligibility could not have been concluded to their detriment merely for having adopted another prescribed formula for reversal. 4. It was further contended that the Tribunal, in Arcadia Shipping Ltd v. Commissioner of CGST & Central Excise, Mumbai [2019-TIOL-2124-CESTAT-MUM], had interpreted rule 2(e) of CENVAT Credit Rules, 2004 to exclude 'ocean freight' from coverage therein and, thereby, precluded the consequence of rule 6 of CENVAT Credit Rules, 2004 on this service. Relying on the deci....
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....eral prescribed in rule 6 of CENVAT Credit Rules, 2004 should not be sustained and that amendment of rule 6 (3A) of CENVAT Credit Rules, 2004 in April 2016 has retrospective effect to determine the outcome of the dispute in their favour. 5. It was also argued that the retrospective application was reiterated by the decision of the Tribunal in Honda Cars India Limited v. Commissioner of Central GST, Customs and Central Excise, Alwar [2021 (2) TMI 948 - CESTAT NEW DELHI] holding that '15. It is also seen that with effect from March 01, 2016, the law has been amended clearly specifying that reversal of CENVAT Credit only on common inputs service is required. While clarifying the said issue, at the time of issue of said amendment, the Government of India vide DOF No. 334/8/2016-TRU dated February 29, 2016 clarified as follows: "(h) Rule 6 of Cenvat Credit Rules which provides for reversal of credit in respect of inputs and input services used in manufacture of exempted goods or for provision of exempted services, is being redrafted with the objective of simplifying and rationalizing the same without altering the established principles of reversal of such cred....
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.... of Rule 6 that the total Cenvat credit for the purpose of formula under Rule 6(3A) is only total Cenvat credit of common input service and cannot include Cenvat credit on input service exclusively used for the manufacture of dutiable goods. 19. This position is also clear from the underlying object of the amendment made in Rule 6(3A) of the Rules by Notification dated March 1, 2016, to consider only common input services and not total input service credit, for the purpose of computing the amount of reversal. 20. Such amendment was also clarified by the Tax Research Unit Circular dated February 29, 2016 to apply retrospectively inasmuch as the clarification clearly mentions that the provisions of Rule 6 providing for reversal of credit in respect of input services used in exempted services, is being redrafted with the objective to simplify and rationalize the same without altering the established principles of reversal of such credit. It has been further clarified at paragraph (iv) of the Circular that the purpose of the rule is to deny credit of such part of the total credit taken, as is attributable to the exempted services and under no circumstances this part c....
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....roportionate reversal of CENVAT credit has now been settled as also the retrospective applicability of the amended provision in several decisions and no justification is adduced for not following the said decisions. 8. The impugned order has arrived at an incorrect computation. Accordingly, the computation is set aside and matter remanded back to the original authority for a fresh decision that is in consonance with law as judicially determined supra." 4.3 Though in the earlier case Tribunal has remanded the matter for recomputation, I do not intend to do the same for the reason that in the present case undisputedly the appellant has reversed the Cenvat credit which is as per the table below:- Sr . N o Period Value of exempt service (other than OFS) Value of exempt services (Ocean freight services) Value of taxable service (Not disputed in the SCN) Total turnover Ratio Total common credit availed on input services Amount of credit reverse d under Rule 6(3A) of CCR, 2004 1 2 3 4 5 6=(3+4+5) 7=[4/ 6] 8 9=(7*8)  ....