2021 (12) TMI 425 - AT - Central Excise

CENVAT Credit - exempt services - demand of an amount at the rate of 5%/6%/7% of the value of exempted services in terms of rule 6 of Cenvat Credit Rules, 2004 - HELD THAT - The Show cause notice alleges that the appellant has availed input credit of common services namely Banking and Financial Services, Professional Services, Telephone Services, Credit Rating Services and Membership of CAPEXILE. The Show cause notice as well as orders of the lower authority do not identify the exact amount of credit taken and the exact nature of common services on which the credit was availed. The matter needs to be remanded - Appeal allowed by way of remand.

Summary

Issues involved:
1. Interpretation of rule 6 of Cenvat Credit Rules, 2004 regarding the demand of an amount against the appellant based on the value of exempted services.

Analysis:
The judgment in question revolves around the interpretation of rule 6 of Cenvat Credit Rules, 2004 concerning the demand of an amount against the appellant based on the value of exempted services. The primary issue at hand is whether the demand of an amount at the rate of 5%/6%/7% of the value of exempted services can be made against the appellant. The Show cause notice alleged that the appellant availed input credit of common services without specifying the exact amount of credit taken or the nature of common services involved. The previous decision in a similar case involving the appellant highlighted the necessity to verify whether the appellant actually availed Cenvat credit on common input services during the relevant period. The Tribunal emphasized the importance of proper verification by the Adjudicating Authority to determine the sustainability of the demand. Consequently, the impugned order was set aside, and the matter was remanded back to the Original Adjudicating Authority for re-adjudication in alignment with the previous directions provided in a specific order dated 05.03.2020.

In conclusion, the judgment underscores the significance of thorough verification and adherence to legal procedures in cases involving the availing of Cenvat credit on common input services and the subsequent demand based on the value of exempted services. The decision emphasizes the need for precise identification and assessment of credit availed, ensuring procedural fairness and compliance with established legal principles.