AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (5) TMI 971
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.... ii. I order to charge and recover interest at appropriate rate on the assessee under the provisions of section 75 of the Act. iii. I impose a penalty of Rs. 10,000/- on the assessee under the provisions of section 77 of the Act for the reasons discussed para 18. iv. I impose a penalty of Rs. 5,78,214/- on the assessee under the provisions of section 78 of the Act for the reasons discussed in para 18. However if the service tax as confirmed above, and interest is paid within 30 days of receipt of this order, the penalty shall be twenty five percent of the service tax demanded. (Provided the reduced penalty is also paid within the said period." 2.1 During the course of scrutiny of the records as a part of conduct of EA-2000 Audit on the records of the appellant, it was observed that Cenvat credits availed on input services, viz., Banking and Other Financial services, C&F services, Commercial Training & Coaching services, Internet and Telecommunication Services, Manpower services, Repair & Maintenance services, Security services, Storage & Warehousing services, GTA services, Legal services, Scientific & Technical Consultancy services, Courier services, CHA servi....
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.... Plot No. B-84, MIDC, Anand Nagar, Additional Ambernath Industrial Ares, Thane, Maharashtra-421506. The details of the same have been given below: S. No. Period Assessable Value (Rs.) Service Tax paid through Cenvat (Rs.) 1 April-Sep (FY 2016-17) 20,05,368/- 2,87,436/- 2 Oct-March (FY 2016-17) 20,05,368/- 2,90,778/- Total 5,78,214/- 2.4 The appellant availed Cenvat credit on services in their capacity as manufacturer. The said services have nexus to the activity of manufacture and therefore being "input services" directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal. Such services, having no nexus with the output service of Supply of Tangible Goods service provided at Huhtamaki PPL Ltd. (Rudrapur), Plot No.70-73, Sector-4, IIE Pantnagar, Rudrapur, U.S. Nagar 263153, Uttaranchal and Huhtamaki PPL Ltd. (Hyderabad), Plot No. 139 & 148, Sri Venkateswara Coop. Indl. Estate, Naraspur, Dist. - Medak, Bolaram-502325, Telangana, cannot be called input service when used by the assessee in the capacity of provider of output service for providing a....
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....vice Tax Liability electronically, through internet banking, on the Services provided at Huhtamaki PPL Ltd. (Rudrapur), Plot No.70-73, Sector-4, IIE Pantnagar, Rudrapur, U.S. Nagar 263153, Uttaranchal and Huhtamaki PPL Ltd. (Hyderabad), Plot No. 139 & 148, Sri Venkateswara Coop. Indl Estate, Naraspur, Dist.-Medak, Bolaram-502325, Telangana. iv. Penalty under Section 78 of the Finance Act, 1994, should not be imposed upon them for contravention of Section 68 of the Finance Act, 1994, read with Rule 6 of the Service Tax Rules, 1994." 2.7 This show cause notice was adjudicated as per the order referred to in para 1 above and the appeal against the said order has been dismissed by the Commissioner (Appeals) as per the impugned order. 3.1 I have heard Shri P.K. Shetty, Advocate for the appellant and Shri P.K. Acharya, Superintendent, Authorised Representative for the Revenue. 3.2 Arguing for the appellant, learned counsel submits that:- The issue involved is in a very narrow compass whereby they have paid the service tax on the service provided by tem by utilising the Cenvat credit available with them. The contention of the Revenue is that the appella....
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....t is settled law that Credit by assessee who is manufacturer as well as service provider, Cenvat credit can be used for payment of excise duty or service tax. However, on the above contention of the appellant I find that as per Rule 201) Credit Rules 2004 input service means any service- (l) "input service" means any service,- (i) used by a provider of taxable service for providing an output service, or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes services used in relation to setting up, modemization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto ....
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....sis on GTA using Cenvat instead of cash. Similarly in the case of Panchmahal Steel Ltd V/s. CCE & ST 2015 (TIOL)-25-HC-AHM-ST the issue was about payment of Service Tax on GTA by the manufacturer using Cenvat instead of cash. In all those cited cases the issue dealt was the payment of service tax on Reverse Charge Mechanism using Cenvat Credit. In the case in hand issue is totally different. Here the payment of service tax on Supply of Tangible Goods service using Cenvat Credit is sought to be denied on the grounds of absence of nexus between input service and output service." 4.3 With effect from 2004 when Cenvat Credit Rules, 2004 were issued, it was stated clearly that cross utilization of Cenvat credit on inputs, input services is being allowed for payment of central excise duty and service tax. That being so, I do not find any merits in the submissions made by the Revenue that utilization of Cenvat credit for payment of output service tax liability of the appellant can be faulted with. Rule 3(4) of Cenvat Credit Rules reads as follows:- "3(4) The CENVAT credit may be utilized for payment of - (a) any duty of excise on any final product; or (b) an ....
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....onsulting engineer. As per the respondent, it is 100% export oriented unit engaged in providing services. The respondent filed an application for refund of unutilized Cenvat credit. On 10-9- 2008, the adjudicating authority issued a notice to show cause as to why the refund claim should not be rejected. On 21-7- 2009, the adjudicating authority rejected the refund claim of the respondent. On 9-8-2010, when the matter was carried before the Commissioner of Central Excise (Appeals) (hereinafter referred to as "the Appellate Authority"), the Appellate Authority, examined the matter including the aspects of limitation of the claim of refund and nexus of input services with different output services and partly allowed the appeal. The respondent further carried the matter before the Tribunal and the Tribunal, insofar as disallowing the claim of refund of Event Management service, Real Estate Agent service, Tour Operator service and Travel Agents service is concerned, vide impugned order dated 20-5- 2014, allowed the appeal. Under the circumstances, the present appeal is before this court." 4.10 In the case of GTL Infrastructure Ltd. [2019 (29) GSTL 650 (Bom.)], Hon'ble Bombay High Cou....
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....his appeal is in respect of utilisation of CENVAT credit for payment of service tax on reverse charge basis GTA (Goods Transport Agency) after the introduction of Cenvat Credit Rules, 2004. (b) In terms of Cenvat Credit Rules, 2004, (introduced on 10/09/2004) the credit of input services was not restricted for utilisation only towards discharge of service tax payable in respect of the output services falling within the same classification head/category. In terms of Rule 11 of Cenvat Credit Rules, 2004, there was a merger of credit earned by manufacturer under the Cenvat Credit Rules, 2004 and the credit earned by provider under the Service Tax Credit Rules, 2002. This balance credit available on 10/09/2004 was allowed to be utilised in the manner permitted under the Cenvat Credit Rules, 2004. (c) In the present facts, the merged credit available under Cenvat Credit Rules, 2004 was utilised by the respondent for discharging service tax payable on reverse charge basis for GTA services. (d) The Revenue objected to the same. However, the Tribunal, by the impugned order dtd.18/01/2018 placed reliance upon the decisions of Delhi High Court in the cases of CST V....