2026 (4) TMI 1830

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....at the Appellant was availing input service credit on rent a cab service and insurance service. It was also noticed that the Appellant had availed cenvat credit on common input services used for providing taxable output service as well as services provided to SEZ in respect of which the Appellant was not maintaining separate accounts as per Rule 6 (2) of cenvat credit Rules, 2004 (CCR).The Department, was of the view that the aforesaid services cannot be deemed to have been used for providing output services, and therefore, the Appellant was not entitled to the credit of input service taken thereon and thus, is required to be disallowed and recovered along with interest in terms of Rule 14 of CCR. The Department was also of the view that the provider of output service who opts not to maintain separate account is required to pay an amount equal to the specified percentage of value of exempted service in terms of sub-rule 3 of Rule 6 of CCR, and that this has not been done by the Appellant. The Department therefore issued two Show Cause Notices covering the period from April 2009 to September 2011, demanding the wrongly availed Cenvat Credit as well as the amounts payable as per the ....

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....edit Rules of CCR and hence setting aside of the demand to that extent was incorrect. 3. Ms. Radhika Chandrasekhar, Ld. Advocate contended that the denial of Cenvat Credit on input services was untenable and argued that the Appellant had to provide pickup and drop facilities to the employees since the factories are located in remote areas and hence the services are used for providing the Appellant's output services. Reliance was place on the decision in CCE vs. Ultratech Cement Ltd. 2010 (260) ELT 369, Order dated 08.12.2016 of Hon'ble High Court of Madras in the case of Commissioner of Central Excise vs. M/s. Visteon Automotive Systems India (P) Ltd. in CMA No.2586 of 2016, CCE, Bangalore vs. Stanzen Toyotetsu India (P) Ltd., 2011 (23) S.T.R. 444 (Kar.) and Commissioner of CGST, Mumbai v Sony Picture Networks India Pvt Ltd, (2024) 20 Centax 473 (Bom). Ld. Counsel contents that the contract with the clients mandated for providing insurance cover and power involved under Employee State Insurance Scheme and the contract provides for inclusion of charges for compliance of statutory requirements like ESI. Reliance is placed on decision in Hindustan Petroleum Corporation Ltd v CC....

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....he Central Government notified the Cenvat Credit (Amendment) Rules 2011 to amend the Cenvat Credit Rules 2004. The rules provided that, save as otherwise provided in these rules, they shall come into force with effect from 01.04.2011. clause (ix) of Rule 5 of these rules, provided as under: "(ix) after sub-rule (6), the following shall be inserted with effect from the 1st day of March, 2011, namely :- "(6A) The provisions of sub-rules (1), (2), (3) and (4) shall not be applicable in case the taxable services are provided, without payment of service tax, to a Unit in a Special Economic Zone or to a Developer of a Special Economic Zone for their authorised operations.". 8. We note that Section 144(1) of the Finance Act, 2012, stipulates inter-alia that sub-rule (6A) of rule 6 of the Cenvat Credit Rules, 2004 shall be deemed to have been amended retrospectively, in the manner specified in column (2) of the Eighth Schedule, on and from the date specified in column (3) of the Schedule, against the rule specified in column (1) of the Schedule. Thus, the period of effect of amendment shown in column (3), of the said Eighth Schedule, namely, from 10th February 2006 to ....

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....at credit on the inputs/input services used in the provisions of output services. These details of such services rendered to SEZ units/developers were reflected in the half yearly ST-3 returns filed by the appellants. Vide Notification No. 3/2011, dated 1-3 2011, the Cenvat Credit Rules, 2004, were amended so as to provide that there is no need to reverse any Cenvat credit taken on inputs/input services if such inputs/input services were used in rendering of output services to SEZ unit/SEZ developer. Further, vide Section 144 of the Finance Act, 2012, the said amendment was given retrospective effect from 10-2 2006 to 20-2-2011. In other words, during the impugned period, there was no need for the assessee to reverse any credit taken on the inputs/input services in respect of which credit was availed for rendering of output services to SEZ units/SEZ developer. The adjudicating authority has completely failed to examine the claim of the appellant, the details of which were provided to him at the time of adjudication. Therefore, we hold that the impugned order is not sustainable in law. 6.1 Further, the Hon'ble High Court of Bombay, in the case of Repro India Ltd., reported in 2009 (....