2023 (8) TMI 738

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....lue, and no CENVAT Credit on input services other than those specified above is taken under the provisions of the CENVAT Credit Rules, 2004. 1.2. It appears that the Revenue chose to verify further the documents such as CENVAT Credit account with S.T.-3 returns filed by the appellant, wherein they appear to have come across the fact that the appellant had availed CENVAT Credit of the Service Tax paid on input services received by them as well. This prompted the Revenue to believe that the appellant was not eligible for claiming abatement as above, which resulted in the issuance of Show Cause Notice dated 09.02.2018. 1.3. In the Show Cause Notice, it was alleged that the appellant was availing CENVAT Credit on the input services, though it had not fulfilled the conditions prescribed under the said Notification and therefore, the assessee was ineligible to avail the abatement provided under the said Notification for the period from July 2012 to June 2017, and that the assessee was consequently liable for payment of Service Tax on the entire taxable value without abatement in terms of Section 67 of the Finance Act, 1994. 1.4. In the said Show Cause Notice, the demand was quantified....

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....ion against entry No. 9 came to be amended with effect from 1st October 2014, wherein it prescribed that CENVAT Credit, on inputs, capital goods and input services, used for providing the taxable services, has not been taken under the provisions of CENVAT Credit Rules, 2004. * The above Notification is a conditional notification and the abatement is available only when the CENVAT Credit is not taken on inputs, capital goods and input services used for providing 'renting of motor vehicle'. * Returns filed by the assessee revealed that in addition to providing renting of motor vehicle service, it is also providing some other services such as business support, service, clearing and forwarding agent service and rent-a-cab service. * In the reply filed by the noticee, they have claimed to have reversed certain amount of CENVAT Credit by adopting the procedure given under Rule 6(3AA) of the CENVAT Credit Rules, 2004, for providing both dutiable and exempted services namely, abatement availed on 'renting of motor vehicle'. * Rule 6(3AA) is not applicable to the assessee's case which will not justify the act of availing abatement under the said Notification sinc....

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....ufacture of exempted goods or for provision of exempted services or input service used in or in relation to manufacture of exempted goods; that in the present case, the assessee had worked out the proportionate amount of credit to be reversed towards providing exempted output service; by availing CENVAT Credit on inputs, input services and capital goods which were utilised for providing taxable services, the appellant has become ineligible for abatement in terms of Notification No. 26/2012-ST and therefore, the finding of the lower authorities as to the violation of the conditions of the above Notification is correct. 7. We have considered the rival contentions and we have also gone through the documents placed on record. 8. After hearing both sides, we find that the only issue to be decided by us is: whether the appellant's claim for abatement in terms of Notification No. 26/2012-ST dated 20.06.2012 is correct? 9. The issue of abatement is an indirect way of granting exemption to the extent prescribed in the statute and abatement is not normally denied on mere surmises or on any allegation of insufficient credit, considering the scheme of CENVAT Credit. But in any case, the....

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....d upon by the Tribunal. The Order-in-Original concluded and to our mind rightly that this was an admitted position of a clandestine removal. There was no payment of Excise duty by the manufacturer on excisable goods. The payment was not made by claiming exemption and entitlement under Notification No. 3/2001-C.E., which is a conditional exemption. This is a case of admitted Modvat credit taken on glasses used in the manufacture of buses and tempo travellers. The assessee did not reverse the Modvat credit at the time of removal of goods or after removal. No efforts were made by the assessee to reverse the same. In the circumstances, when there is an admitted position emerging from the record, we are of the view that the Tribunal erred in law in reversing such a conclusion in the Order-in-Original. The Tribunal, in reversing this order, relied upon the cases and which have been brought to our notice. We must note them and in some details." held that reversal is sufficient compliance with condition of non-availment. Though the decision of the Tribunal in Mysore Sales International Limited v. Commissioner of Central Excise, Customs and Service Tax, Bangalore LTU [2014-TIOL-1950-CESTA....