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2024 (3) TMI 1102 - AT - Service TaxCENVAT Credit - activity of trading as well as erection, commissioning and installation services - non-maintenance of separate account for their input/input services used for providing taxable services as well as exempted services - violation of the provisions of Rule 6(3) of Cenvat Credit Rules, 2004 - HELD THAT - As held by the Hon ble Telengana High Court in M/S TIARA ADVERTISING VERSUS UNION OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE 2019 (10) TMI 27 - TELANGANA AND ANDHRA PRADESH HIGH COURT that if the appellant has taken Cenvat Credit wrongly, Rule 14 of the Cenvat Credit Rules, 2004 empowers the authorities to recover such credit availed by the assessee wrongly. Admittedly in this case, no demand has been raised against the appellant under Rule 14 of the Cenvat Credit Rules, 2004. Therefore, relying on the decision of the Hon ble Telengana High Court in the case of Tiara Advertising vs. UOI, it s held that the demands are not sustainable against the appellant, therefore, the impugned order is set aside - appeal allowed.
Issues:
The judgment involves a demand raised against the appellant for violation of Rule 6(3) of Cenvat Credit Rules, 2004 due to not maintaining separate accounts for input/input services used for taxable and exempted services. Details: The appellant, engaged in trading and services, availed Cenvat Credit without separate accounts for taxable and exempted services. A show cause notice demanded payment under Rule 6(3) of Cenvat Credit Rules, 2004, for not maintaining separate accounts. The matter was adjudicated, confirming demands for exempted services. The appellant contested the demand under Rule 6, citing a High Court decision. The Revenue argued for the demand based on non-maintenance of separate accounts. The appellant's submission was supported by a High Court decision stating that Rule 6(3) offers options to service providers not maintaining separate accounts. Authorities cannot choose options on behalf of the service provider. The Court noted that Rule 14 empowers recovery of wrongly availed credit, which was not applied in this case. Relying on the High Court decision, the Tribunal held the demands were not sustainable, setting aside the impugned order and allowing the appeal. This judgment clarifies the applicability of Rule 6(3) of Cenvat Credit Rules, 2004, regarding the maintenance of separate accounts for input/input services used for taxable and exempted services. It emphasizes the importance of following statutory provisions and the limitations on authorities in choosing options on behalf of service providers.
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