TaxTMI 
TaxTMI 
2023 (12) TMI 779
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....d of Rs. 18,03,72,274/- under rule 14 of CENVAT Credit Rules, 2004, along with interest as applicable, and imposed penalty of like amount under rule 15 of CENVAT Credit Rules, 2004 even while dropping the demand for recovery of Rs. 19,53,96,311/-. 2. The appellant had been manufacturing goods and also undertake trading in goods and the dispute pertains to the credit availed on 'input service' alleged to have been deployed in common that was attributable to the latter. The primary objection of central excise authorities appears to have been that the pro-rata adjustment, undertaken by the appellant, is not in conformity with rule 6 of CENVAT Credit Rules, 2004 and that the adjustment for reversal done on annual basis should, in fact, have ....
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....ew that exemptions from taxation have a tendency to increase the burden on the other unexempted class of tax-payers and should be construed against the subject in case of ambiguity. It is an equally well-known principle that a person who claims an exemption has to establish his case. Indeed, in the very case of M/s. Parle Exports (P) Ltd. relied upon by Sri Narasimhamurthy, it was observed : "While interpreting an exemption clause, liberal interpretation should be imparted to the language thereof, provided no violence is done to the language employed. It must, however, be borne in mind that absurd results of construction should be avoided." The choice between a strict and a liberal construction arises only in case of doubt....
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....ue in question is limited to the extent to which the appellant was in conformity with the prescription in rule 6(3) of CENVAT Credit Rules, 2004 pertaining to consequence of non-maintenance of separate records. The appellant contends that they were in conformity with rule 6(2) of CENVAT Credit Rules, 2004 inasmuch as they had segregated the utilization of common 'input services' between excisable goods and exempted services. We find that the Tribunal, in re Star Agriwarehousing & Collateral Management Ltd, has held that '8. We have heard the rival contentions and are of the view that it is a matter of record that the appellant have been providing both taxable and exempted output services in respect of which they have been ava....
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....stantial benefit to the appellant. 9. We are also of the view that once the proportionate reversal of the Cenvat credit has taken place, that tantamount to not availing of the input services credit of the common inputs which are going into the exempted services. While holding this view we take shelter of the decision of the Hon'ble Supreme Court in the case of Chandrapur Magnet Wires (P) Ltd. v. Collector of Central Excise, Nagpur - 1996 (81) E.L.T. 3 (S.C.). 10. We also take note of this Tribunal's decision on the same issue in case of M/s. The Oberoi Rajvilas v. Commissioner of Central Excise, Jaipur reported under 2018 (5) TMI 1715 - CESTAT New Delhi, the relevant extract of same are reproduced here below :- "9....
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.... and non-excisable goods are very much on record, therefore, the suppression of fact cannot be attributed on the part of the appellant. We also find that since the issue regarding reversal of Cenvat credit under Rule 6(3) is contentious and various cases on the same issue have been made out which can be seen from such of judgment given above, therefore, on the issue related to Rule 6(3) particularly in the facts of the present case it cannot be said that the appellant had mala fide intention to evade payment of duty. Therefore, demand for the extended period is also hit by limitation for the same reason the penalties imposed are also unsustainable.' 7. In re Reliance Media World Ltd, it has been held '7. It is appropriate that w....
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....ices rendered in the rest of India could have been achieved by isolating a portion of the inputs/input services as attributable to services rendered in the State of Jammu and Kashmir. In such a situation, there is no logic or soundness to hold that the inputs/input services used for rendering 'broadcasting service' should be restricted to such as evidenced to have been used for rendering service in the rest of India. In these circumstances the availment of the Cenvat credit to the full extent cannot be questioned. Its utilisation thereof cannot also be restricted. 9. If the output services were to be distinctly identifiable as one which is exempt (other than territorially) in contradistinction with a taxable service and if the inpu....