cenvat rule 6(3A) procedure lapse, Service Tax

[satbir singh wahi]

During audit by Service tax dept , the procedure lapse of non intimation to dept. has been detected. Whether proportionate cenvat can be allowed after reversal of cenvat on exempted services.Dept . insisting for full cenvat disallowance.

Posts / Replies

[MARIAPPAN GOVINDARAJAN]

Whether you have exercised the option under Rule 6(3)?

[satbir singh wahi]

Sir

There is procedure lapse , no intimation to dept done.

[MARIAPPAN GOVINDARAJAN]

You may now give option under Rule 6(3) and give the details of intimation as under Rule 6(3A) and sought for condonation of delay as it is not wanton. Even if the department issues show cause notice it will give weightage. In the meantime you may reverse the credit proportionately and pay also interest for the same. In the reply you can contend for proportionate CENVAT credit.

[satbir singh wahi]

Thanks Sir

Whether Audit party will allow proportionate credit ? Pls give, if any ruling or case law to claim proportionate cenvat in case of procedure lapse.

[MARIAPPAN GOVINDARAJAN]

It is up to you to challenge on your own. There is no case law in this regard to the best of my knowledge.

[satbir singh wahi]

Thanks Sir

[MARIAPPAN GOVINDARAJAN]

Ok good luck

[Ganeshan Kalyani]

Penalty may be proposed to impose as ignorance of law is not an excuse.

[Himansu Sha]

The assessee has the option of following the procedures of rule 6(3)(I) or (ii) . if no declaration filed for either of the options, then department may ask for sequential observance of the provisions. Hence they may ask for reversal of 6% of the value of exempted services.

[Himansu Sha]

May refer the Hon,blue APex court decision - chandrapur magnet wire

[KASTURI SETHI]

SCN will be issued for non-reversal as well as non intimation. Now ball is in the court of the department and not in the hands of asseessee.

[KASTURI SETHI]

Dear Querist,

This case law may be relevant for you.

2017 (347) E.L.T. 112 (Tri. - Bang.) = 2016 (8) TMI 387 - CESTAT BANGALORE CRANES & STRUCTURAL ENGINEERS Versus COMMR. OF C. EX., BANGALORE-I

[satbir singh wahi]

Thanks Sir for this case law.

[KASTURI SETHI]

Welcome Sir.