2021 (3) TMI 778 - AT - Service Tax

Reversal of CENVAT Credit - services provided to the service recipient located in the state of Jammu Kashmir, which is exempted service - appellant is not maintaining separate account of inputs/input service used for providing exempted and taxable service - appellant has not provided any documentary evidence such as C.A. certificate with regard to payment of service tax - appellant has cleared inputs as such but has not reversed the cenvat credit availed on these inputs and no documents have been provided by the appellant in respect of reversal of the cenvat credit. HELD THAT - As per Rule 2(e)(1), the taxable service, which is exempt from the whole of the service tax leviable thereon, is an exempted service. It is not the case of any side that the service which has been provided under the state of Jammu Kashmir has been exempted as whole. Therefore, the said provision is not applicable to the facts of this case. On consideration of the decision in the case of Adecco Flexione Workforce Solutions Ltd 2015 (11) TMI 1047 - CESTAT BANGALORE the period of dispute is year 2008-09, whereas the definition of exempted service under Rule 2(e) of the Cenvat Credit Rules, 2004 has been introduced on 20.06.2012; therefore, the said decision is not applicable to the facts of this case. Further, in the case of Ramboll Imisoft Pvt Ltd 2016 (6) TMI 1071 - CESTAT HYDERABAD , this Tribunal has examined the issue in details and examined the definition of exempted service under Rule 2(e) of the Cenvat Credit Rules, 2004 and held that Section 64 of the Finance Act is not applicable to the state of Jammu Kashmir. The appellant is providing taxable service and not any exempted service in the state of Jammu Kashmir, for which reversal of the cenvat credit is sought by the Revenue, therefore, the provisions of Rule 6(3) of the Cenvat Credit Rules, 2004 are not applicable to the facts of this case. CENVAT Credit denied - Non production of documentary evidence such as C.A. certificate for payment of service tax on exempted service by the appellant - HELD THAT - The appellant has produced the C.A. certificate dated 14.09.2019 and placed before me which certifies that the appellant has paid service tax on these exempted service, therefore, the said payment of service tax shall amounts to reversal of the cenvat credit of ₹ 93,206/- in the light of the decision of Hon ble High Court of Bombay in the case of THE COMMISSIONER OF CENTRAL EXCISE, PUNE VERSUS AJINKYA ENTERPRISES 2012 (7) TMI 141 - BOMBAY HIGH COURT . Hence, the said amount of ₹ 93,206/- is set aside. CENVAT Credit - denial on the ground that there is no evidence on record that inputs cleared as such, the appellant has reversed the cenvat credit - HELD THAT - The invoice itself speaks that the cenvat credit has reversed in terms of Rule 3(4) of the Cenvat Credit Rules, 2004 and also produced the C.A. certificate along with details of all the invoices - the appellant has already reversed the cenvat credit of ₹ 87,036/-. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Demand raised under Rule 6(3) of the Cenvat Credit Rules, 2004 for services provided in Jammu & Kashmir.
2. Confirmation of demand due to lack of documentary evidence for payment of service tax.
3. Confirmation of demand for not reversing cenvat credit on cleared inputs.

Analysis:
1. The appellant contested the demand under Rule 6(3) for services provided in Jammu & Kashmir, arguing that they are not required to reverse the cenvat credit based on a previous Tribunal case. The appellant also presented a C.A. certificate to prove payment of service tax on exempted services, which negates the need for cenvat credit reversal. The Tribunal found that the services provided were taxable, not exempted, in Jammu & Kashmir, thus ruling in favor of the appellant.

2. The demand for lack of documentary evidence regarding service tax payment was challenged by the appellant with the submission of a C.A. certificate confirming the payment, aligning with a High Court decision. Consequently, the Tribunal set aside the demand amount of &8377; 93,206.

3. Regarding the demand for not reversing cenvat credit on cleared inputs, the appellant demonstrated through invoices and a C.A. certificate that the cenvat credit had been reversed as required by Rule 3(4) of the Cenvat Credit Rules, 2004. The Tribunal accepted this evidence and ruled in favor of the appellant, setting aside the demand of &8377; 87,036.

In conclusion, the Tribunal found no merit in the impugned order and allowed the appeal with consequential relief. The judgment extensively analyzed the legal provisions, previous decisions, and evidence presented by both parties to reach a fair decision in each issue raised.