2018 (12) TMI 1041 – CESTAT HYDERABAD – TMI – CENVAT Credit – common input services which were used for both taxable and exempted services – Rule 6(3) of CCR 2004 – Held that:- As far as the services utilised in the Corporate Office on which they have taken the credit is concerned, there cannot be separate records for different projects (exempted and taxable). Therefore, the appellant had an option under Rule 6(3) of either reversing the proportionate amount of credit or paying 6% of the value of the exempted projects – impugned order upheld.
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As far as other demands confirmed in the impugned order are concerned, the appellant concedes the same.
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Penalties – Held that:- It is clear that the appellant has declared that they have maintained separate records in their return whereas they have not disclosed that they also are availing credit on common input services availed in the Corporate Office and have not reversed the proportionate amount of credit attributed to the exempted
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the exempted services as required under Rule 6(3) of CCR 2004. Some other discrepancies were also noticed and a show cause notice was issued to the appellant calling upon to explain as to why- a) An amount of ₹ 18,90,121/- @ 6% of the value exempted services should not be demanded from them as per Rule 6(3)(i) under Rule 14 of CCR 2004 read with the proviso to Section 73(1) of the Finance Act, 1994, for the period 01.10.2013 to 01.07.2014. b) An amount of ₹ 11,56,727/- should not be demanded from them towards non payment of service tax for the period 11.07.2014 to 30.09.2014. c) Irregular input service tax credit of ₹ 5,26,742/- on input services used exclusively for the exempted services during the period 01.10.2013 to 10.07.2014 should not be recovered. d) An amount of ₹ 8,45,644/- should not be demanded from them towards non payment of service tax for the period January 2014 to March 2014. e) An amount of ₹ 2,97,730/- being irregular availment of input
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paid the same along with interest and therefore the lower authority should have confirmed the demands and appropriated the amounts paid against the demands instead of dropping the demand on these two issues. He, therefore, modified the order with respect to these two demands. (iii) With regard to the availment of irregular CENVAT Credit of ₹ 2,93,730/-, he found that Revenue has appealed against dropping of ₹ 2,62,840/- only of which an amount of ₹ 2,16,972/- was with respect to credit on health and life insurance policies for the employees and held that credit on these services were not admissible. He rejected the Revenue s appeal with respect to ₹ 45,868/-. 3. In their present appeal, the appellant has prayed for dropping of the demand of ₹ 18,90,121/- and dropping of all penalties. They conceded the confirmation of the remaining amounts. In this factual matrix, the only fact to be decided is (a) whether the appellant is liable to pay an amount of ₹
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ch has a specific column for the details of the credit availed at their Corporate office. He argued that the services of the Corporate Office are availed by all the projects – both exempted and taxable – and therefore should be considered as common input services. The appellant could have reversed the proportionate amount of common input service credit availed attributable to the exempted projects but they failed to do so. They are, therefore, required to pay an amount @ 6% of the value of the exempted projects under Rule 6(3) of CCR 2004. On a specific query from the Bench, Ld. Representative of the appellant concedes that they have availed CENVAT Credit of input services in the Corporate Office and have not reversed the proportionate amount of credit with respect to the exempted projects. He asserts that as far as other services including the Telephone, FAX, photocopier etc. are concerned, which are used in the project, they have maintained a separate account for the exempted project
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onate amount of credit or paid 6% of the value of exempted projects under Rule 6(3) of CCR 2004. The appellant s argument is that they have maintained separate records for each project. Be it as it may, as far as the services utilised in the Corporate Office on which they have taken the credit is concerned, there cannot be separate records for different projects (exempted and taxable). Therefore, the appellant had an option under Rule 6(3) of either reversing the proportionate amount of credit or paying 6% of the value of the exempted projects. It is evident from the records that they have not done either and therefore the demand was confirmed by the first appellate authority @ 6% of the value of exempted projects. I have, therefore, no option but to uphold the impugned order on this ground. As far as other demands confirmed in the impugned order are concerned, the appellant concedes the same. As far as the penalties on the appellant are concerned, it is clear that the appellant has de
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