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2017 (8) TMI 110 - AT - Service TaxCENVAT credit - providing of taxable as well as exempted services - non-maintenance of separate set of books - Rule 6(3) of the CCR, 2004 - Held that - In the SCN, no details have been provided and it has been merely issued on the ground that the respondent has availed certain amount of Cenvat Credit on capital goods & input services and as per Rule 6(6) of Cenvat Credit Rules, 2004, they are entitled to avail on 20% of credit, therefore, they are required to reverse the Cenvat Credit excessively availed by them but there is no bifurcation has been given in the show cause notice whether this entire Cenvat Credit pertains to the services other than enumerated under Rules 6(5) of Cenvat Credit Rules, 2004 or capital goods. In the absence of that evidence, the Revenue cannot alleged at this stage that the Ld. Adjudicating Authority has not verified the records - Revenue has not come with any evidence on record contrary to the verification conducted by the Ld. Adjudicating Authority - appeal dismissed - decided against Revenue.
Issues Involved:
- Verification of records by the adjudicating authority - Consideration of Chartered Accountant certificate in the impugned order - Adequacy of details in the show cause notice - Entitlement to Cenvat Credit on capital goods and input services Analysis: 1. Verification of records by the adjudicating authority: The Revenue contended that the impugned order lacked verification as the adjudicating authority did not obtain verified records from the range jurisdictional authorities. However, the respondent argued that the Chartered Accountant certificate and relevant records were presented before the authority for verification, leading to the dropping of proceedings. The Tribunal noted that the authority decided the legal issue first and then verified the records. It observed that the show cause notice lacked details and did not specify whether the Cenvat Credit pertained to services other than those enumerated under the Cenvat Credit Rules. The Tribunal found no evidence to support the Revenue's claim that the authority did not verify the records, ultimately upholding the impugned order. 2. Consideration of Chartered Accountant certificate in the impugned order: The Revenue argued that the impugned order did not consider the Chartered Accountant certificate presented by the respondent. In response, the respondent stated that the certificate and relevant records were provided to the adjudicating authority for verification, leading to the dropping of proceedings. The Tribunal noted that the authority had indeed considered the certificate and verified the records before passing the impugned order. As no evidence was presented to contradict this verification process, the Tribunal upheld the impugned order. 3. Adequacy of details in the show cause notice: The show cause notice issued to the respondent lacked specific details, as it only mentioned that the respondent had availed a certain amount of Cenvat Credit without providing a breakdown of whether this credit related to services not covered under the Cenvat Credit Rules. The Tribunal highlighted the absence of evidence in the notice to support the Revenue's claim that the adjudicating authority had not verified the records. Due to this lack of specificity in the notice, the Tribunal found no grounds to set aside the impugned order. 4. Entitlement to Cenvat Credit on capital goods and input services: The case revolved around the respondent providing Tele-Communication services and availing Cenvat Credit on both taxable and exempted services without maintaining proper accounts. The adjudicating authority, after verifying the records and Chartered Accountant certificate, allowed full Cenvat Credit on capital goods and services enumerated under the Cenvat Credit Rules. For other services, the authority restricted the Cenvat Credit to 20%. The Tribunal upheld this decision, noting that the authority had properly verified the entitlement to Cenvat Credit based on the records provided, leading to the dismissal of the Revenue's appeal.
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