TaxTMI 
TaxTMI 
2023 (6) TMI 147
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....pellants availed credit of different input services for construction of entire complex. Once they received occupation certificate on 27.01.2017, the unsold are of 46,200 sq.ft. of flat/residential complex were rendered outside the purview of service tax as there was no requirement of payment of service tax once occupation certificate was granted. It is also undisputed that in the construction of the said unsold area of 46,200 sq.ft, all the input services on which credit had been taken by the appellants from time to time were used. Thus, the construction of the complex to the extent of the said unsold area was an activity on which service tax was not required to be paid. The said activity obviously became an exempted activity. Appellants have contended that they were undertaking "works contract service" and the said service was an output service which cannot be construed to be exempted service and therefore, there is no requirement of reversal under Rule 63) of CCR. They have also placed reliance on Tribunal Ahmedabad's decision in the case of Alembic Limited Vs. CCE. ST. Vadodara-1[2019]101 taxmann.com: 461 (Ahmedabad-CESTAT). I find that Rule 6(1) of the Cenvat Credit Rules, ....
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....hich is neither a service nor manufacture [paras 16, 17, 18, 19, 20] Hon'ble Apex Court vide its decision dated 1" April, 2019 dismissed the assessee's appeal against Hon'ble Delhi High Court Order. While dismissing the appeal Hon'ble Apex Court observed: "We have heard Learned Counsel appearing for the appellant and perused the impugned order passed by the High Court of Delhi. In our considered view, the reason assigned by the High Court in passing the impugned order needs no interference as the same is in consonance with law Accordingly, there is no merit in the appeal and [it] is dismissed." In view of the categorical ruling of Hon'ble Apex Court the decision of CESTAT Ahmedabad in the case of Alembic Ltd. Vs. CCE & ST Vadodara, relied upon by the appellant is no longer a correct ratio. Therefore, the requirement of reversal under Rule 6(3) of CCR is established in terms of the prevailing law. 6.3 Appellants have contested the quantification of the amount of reversal arrived at by the department arguing that if at all reversal was required, the cenvat credit balance as on the date of grant of occupation certificate should be taken. It would be ....
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....e CENVAT Credit Rules, 2004, read with Section 75 of the Finance Act, 1994". It is evident that the quantum of demand raised in the SCN is Rs. 21,33,150/- only. It is a settled law that the SCN is the foundation of an Order, therefore, the adjudicating authority has clearly erred in confirming demand of Rs. 31,46,324/-. Obviously, the amount liable to be reversed remains the same i.e. Rs. 31,46,324/- (Rs 21,33,150/- ie the demand raised in the SCN R 10,13,174/- already paid by the appellants) However, the requirement of confirmation derby to the extent of the demand raised in the SCN would have consequences in respect of penalty. As the penalty is required to be equal to the duty tax confirmed, and in the instant case, the demand could not have been confirmed beyond Rs. 21,33,150/- as raised in the SCN, the penalty of Rs 31,46,324 imposed under Section 78 in the 0- I-0 would merit to be scaled down to Rs. 21,33.150/-." 2.1 Appellant is providing taxable services viz. construction of residential complex services. 2.2 During the course of audit, it was observed that the appellant had reversed Cenvat credit of Rs.10,13,174/- proportionate pertaining to unsold area of 46,200 sq.f....
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.... reiterates the findings recorded in the impugned order. 4.1 I have considered the impugned order along with the submissions made in the appeal and during the course of arguments. 4.2 I find that the issue involved is no more res integra covered squarely by the decision of Hon'ble High Court of Gujarat in the case of Alembic Ltd. [2019 (29) GSTL 625 (Guj.)], wherein the Hon'ble High Court has held as follows:- "10. The Tribunal after considering the facts of the case and relevant provisions of the Act arrived at following conclusion : "(a) For the above reasons, the Appellants are not liable to pay 8%/10% amount of value of service became exempted after receipt of completion certificate under Rule 6 of the CCR. (b) The Cenvat credit on input services received after obtaining Completion Certificate cannot be wholly allowed to the Appellant, and since they had availed only proportionate credit by maintaining separate accounts, the same is therefore sufficient compliance of the legal obligation cast upon them. (c) The Appellants can be said to have "maintained proper separate accounts" as required under Rule 6 of the CCR, 04, having availed credit only to the extent input....
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.... be exempt from service. "6. (1) The CENVAT credit shall not be allowed on such quantity of input as is used in or in relation to the manufacture of exempted goods or for provision of exempted services or input service as is used in or in relation to the manufacture of exempted goods and their clearance upto the place of removal or for provision of exempted services and the credit not allowed shall be calculated and paid by the manufacturer or the provider of output service, in terms of the provisions of sub-rule (2) or sub-rule (3), as the case may be : Provided that the CENVAT credit on inputs shall not be denied to job worker referred to in rule 12AA of the Central Excise Rules, 2002, on the ground that the said inputs are used in the manufacture of goods cleared without payment of duty under the provisions of that rule. Explanation 1. - For the purposes of this rule, exempted goods or final products as defined in clauses (d) and (h) of rule 2 shall include non-excisable goods cleared for a consideration from the factory. Explanation 2. - Value of non-excisable goods for the purposes of this rule, shall be the invoice value and where such invoice value is not availab....
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....fter 13-4-2016, since the respondent had availed only proportionate credit, the respondent was not legally required to pay 8%/10% amount under Rule 6(3) of the Rules, since it can be said to have maintained separate accounts as required under Rule 6(2) of the Rules. As respondent has taken only proportionate credit on input services after receipt of completion certificate, duly backed by CA certificate and certified work sheets for the proportionate credits availed after completion certificate, it has fulfilled its obligation under Rule 3 of the Rules read with Rule 6 thereof and therefore, no liability to pay any amount equal to 8%/10% of the sale price of immovable property can be fastened after receipt of completion certificate under Rule 6 of the Rules. While the law does not intend to allow any undue benefit to a service provider in terms of Cenvat credit of service tax paid on input services used in providing non-taxable output activity, however, once it is legally and validly availed, the same cannot be denied and/or recovered unless specific provisions exist for the same and credit entitlement is on the date of receipt of inputs when the output activity was wholly dutiable ....