TaxTMI 
TaxTMI 
2026 (2) TMI 1022
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....pecial Category of Persons) Rules 2005. It was also ascertained that the appellant was availing exemption under Notification No.13/2004-ST dated 10.09.2004 in respect of service provided to Government in relation to collection of duties and taxes. The appellant was found to be availing Cenvat credit in respect of common input services like Telephone, Audit Fees etc which are used for providing both taxable and exempted services. However, the appellant has not maintained separate accounts for receipt, consumption and inventory of input services meant for use in dutiable output service / exempted output services in terms of Rule 6 (2) of Cenvat credit Rules 2004. In as much as the appellant was providing both exempted and taxable service, the Department was of the view that the appellant ought to have restricted the availment of Cenvat credit to the extent of 20% of the taxable amount upto March 2008 and from April 2008 they ought to have followed the procedure prescribed under the amended Rule 6(3) of the Cenvat Credit Rules, 2004. Instead they were found to have utilised Cenvat credit wrongly in excess to the tune of Rs.10,85,220/- for the period from 2006-07 to 2007-08. From April....
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....encing the non availment of the service tax exemption. It was also argued that therefore the question of restricting utilisation of cenvat credit / reversing Cenvat credit does not arise. Ld. Counsel further contended that extended period cannot be invoked and penalty also is not imposable given the fact that the appellant is a Govt. entity. It was also urged that the issues involves legal interpretation and the appellant being a Public Sector Bank the confirmation of demand for the larger period and imposition of penalty was incorrect. 6. Ms. Anandalakshmi Ganeshram, Ld. Authorised Representative, reiterated the findings of the Appellate Authority in the impugned order and placed reliance on the following case laws and circular. 1) M/s. Kosamattam Finance (P) Ltd. (2022 (65) GSTL 74 (Tri. Bang) 2) Kattukaran Leasing and Investments Ltd. (2010 (19) STR 499 (Tri. Bang) 3) Thermax Ltd. (2007 (8) STR 487 (Tri. Mum) 4) Circular No.80/10/2004-ST dated 17.09.2004 5) Dorma India Ltd. (2023 (8) TMI 1691 Tri. Chennai 7. Heard both sides, perused the appeal records and the case laws and circular submitted. 8. The issue that arise for dete....
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.... Input Service Distributor under the Act; (2) Whether the Tribunal is correct in setting aside the imposition of penalty under erstwhile Rule 15(4) of the Cenvat Credit Rules, 2004, on the facts and circumstances of the case? and (3) Whether Tribunal is correct in allowing the Cenvat credit on CHA services when the same is availed after the goods has been cleared from the place of removal?" 3. So far as the first and second substantial questions of law are concerned, the issue has already been decided in the case of Commissioner of Central Excise v. Dashion Ltd. [2016 (41) S.T.R. 884 (Guj.)] wherein, the Court held as follows :- "7. The second objection of the Revenue as noted was with respect of non-registration of the unit as input service distributor. It is true that the Government had framed Rules of 2005 for registration of input service distributors, who would have to make application to the jurisdictional Superintendent of Central Excise in terms of Rule 3 thereof. Sub-rule (2) of Rule 3 further required any provider of taxable service whose aggregate value of taxable service exceeds certain limit to make an application for registration wi....
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....which is not forthcoming either in the orders of the appellate authority or the order of the adjudicating authority which admittedly notes that the reply dated 20-082010 has been filed. It is also seen that in the impugned order the Appellate Authority has held that the second limb of the definition of exempted services is attracted since the value pertained to interest earned on loans that did not form part of the taxable value of services as per Section 67 of the Act, which itself is a finding beyond the show cause notice as the SCN does not reflect such an allegation. Even otherwise, the said finding is misconceived as the exempted services under Rule 2(e) which has been extracted in the impugned order pertains to services on which no service tax is leviable under Section 66 of the Finance Act. The exemption of a service from the charge of service tax under Section 66 of the Finance Act 1994, even though the rate of tax levied is specified as the stipulated percentage of the value of such taxable service, is inherently and materially distinct from the exclusion of an element from the gross amount charged by the service provider for such service under Section 67 that provides for....