2018 (9) TMI 1381 - AT - Service Tax

CENVAT Credit - Rule 6(3) of CCR - plea of appellant is that they have not availed credit of input services for use in exempt final products - Held that - If the appellant has not availed Cenvat credit in respect of Common Cenvatable Input Services the provisions of Rule 6(3) would not get invoked. As such for verification of the above plea of the assessee, the impugned order is set aside and matter remanded to Original Adjudicating Authority for fresh decision based upon the outcome of factual verifications - matter on remand. Demand in respect of outward transportation of the goods is not disputed by appellant and is upheld. Penalty - Held that - Inasmuch earlier orders of the Authorities were in favour of the assessee, there could not be any mala fide so as to attract the penal provisions - penalty set aside. Appeal disposed off.

Summary

Issues:
1. Application of Rule 6(3) of Cenvat Credit Rules
2. Verification of plea regarding availing of Cenvat credit for common input services
3. Small demand related to outward transportation of goods
4. Imposition of penalty and confirmation of interest

Analysis:

1. The judgment addressed the issue of the demand confirmed against the appellant under Rule 6(3) of Cenvat Credit Rules, which pertains to availing Cenvat credit for exempted final services. The appellant contended that they did not avail Cenvat credit for input services used in providing exempted services and that no common services were utilized for both exempted and dutiable services. The appellant, however, did not raise this plea before the Original Adjudicating Authority. The Tribunal agreed with the appellant's contention and remanded the matter for verification, stating that if no Cenvat credit was availed for common input services, Rule 6(3) would not apply, necessitating a fresh decision based on factual verifications by the Adjudicating Authority.

2. The judgment also discussed a small demand of &8377; 13,985 related to outward transportation of goods, which the appellant acknowledged as decided against them by a recent Supreme Court decision. The appellant did not dispute this amount. Regarding the penalty, the appellant argued that since previous orders were in their favor, there was no mala fide intention to attract penal provisions. The Tribunal agreed with the appellant, setting aside the penalty and upholding the demand of &8377; 13,985 along with the confirmation of interest. The appeal was disposed of accordingly.

Therefore, the judgment primarily focused on the application of Rule 6(3) of Cenvat Credit Rules, the verification of the plea regarding availing Cenvat credit for common input services, the small demand related to outward transportation of goods, and the imposition of penalty and confirmation of interest based on the specific circumstances and arguments presented by the parties involved.