2018 (8) TMI 492 – CESTAT KOLKATA – TMI – CENVAT Credit – common input service used for both taxable and exempted services – Rule 6(3) of CENVAT Credit Rules – Held that:- The lower authority has failed to make any justifiable grounds before confirmation of demand in respect of submission of the appellant that they never availed and utilised Input service credit towards exempted service in respect of road construction. The department also failed to submit any calculation sheet/reconciliation statement specifying the details of such alleged Cenvat Credit with supportive evidence and in absence of any such evidence this appellate forum is not in a position to make the correct decision.
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Before raising such demand, proper investigation is required and in absence of any material facts with corroborative evidence, the same is not maintainable.
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Appeal dismissed – decided against Revenue. – Appeal No.ST/75604/2018 – FO/76466/2018 – Dated:- 23-7-2018 – Shri P.K. Choudhary, Member
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s etc. The department also observed that they have neither exercised any option nor paid any amount of duty under Rule 6 which resulted non-payment of Service tax of ₹ 20,53,252/- (5% of ₹ 4,10,65,033/-. 4. I find that the ld. Commissioner (Appeals) has dealt the issue in detail. The relevant portions of the impugned order are reproduced here: 5. I have carefully gone through the case records on record, grounds of appeal and submissions made subsequently. On perusal of the O/O, I find that the lower authority have confirmed the demand on the ground that as the notice has not opted for maintaining separate accounts for providing taxable and exempted service, the department was free to demand amount equal to five percent on the value of exempted service i.e. ₹ 4,10,65,033/- under Rule 6(3)(i) of the Rules. The appellant contended that the observation of the lower authority and stated that the alleged availing of credit on the inputs on Security Service, Courier Service,
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the basis of interference and not on the basis of correct fact based on supportive evidence. I find the lower authority has also failed to make any justifiable grounds before confirmation of demand in respect of submission of the appellant that they never availed and utilised Input service credit towards exempted service in respect of road construction. The department also failed to submit any calculation sheet/reconciliation statement specifying the details of such alleged Cenvat Credit with supportive evidence and in absence of any such evidence this appellate forum is not in a position to make the correct decision. Here, on the basis of mere Audit objection, the department raised the demand without making necessary investigation and without any basis of evidence when the appellant claims that they did not maintain separate ledger as no Cenvat Credit was taken being exempted service. It is also noticed from their submission that the appellant did not sub-let the work of road constru
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er charges and Security expenses as shown in the financial statement for the financial year 2011-12 does not relate to construction of road. 8. Regarding the aspect of limitation as raised by the appellant, I find that the impugned demand notice was issued on 12.04.2013 involving the period from 2008-09 to 2011-12 by invoking extended period for the reasons that they have suppressed the income of exempted service i.e. Construction of road in their statutory return. On scrutiny of the case records, I find they maintained proper records and the fact of availment of Cenvat Credit were duly disclosed in their statutory return during the disputed period. More so, when the department detected non-maintenance of separate records during the investigation, the appellant produced all the records, as demanded and the department did not raise objection towards non-submission of document. Hence, the appellant cannot be accused that they have suppressed the material facts to the department. I find t
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