9911796707
TMI Blog2009 (7) TMI 1085X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the appellant has not been maintaining separate accounts for consumption of input service meant for taxable as well as non taxable service; that the appellant was served with a SCN dated 8-1-2007 alleging that the appellant availed 100% cenvat credit under rule 6(5) of the Cenvat Credit Rules, 2004, instead of restricting to 20% credit and accordingly, the appellant was directed to show cause as to why the Service tax of Rs. 52,218/- availed during the period from April, 2006 to September, 2006 should not be recovered under section 73 of the Finance Act, 1994 (hereinafter referred as the Act), interest should not be demanded under Section 75 of the Act and penalty should not be imposed under Sections 76, 77 and 78 of the Act; that on adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s per new proviso to section 78 inserted by the Finance Act, 2008 with effect from 10-5-2008 and if penalty is payable under section 78, then the provisions of Section 76 shall not apply; (vi) that without prejudice to the above, the appellant submitted that no penalty is imposable in view of Section 80 of the Finance Act, since the appellant has proved beyond any shade of doubt that the respondent has erred in not taking the right interpretation of Rule 6(5) of the Cenvat Credit Rules. 3. PH was held on 7-7-2009 at 02.30 PM. Shri Sunil Datt Vyas, F.C.A. duly authorized by the appellant company appeared before me along with Shri Ashok Mittal, Asstt. Vice President of the appellant company at 02.30 PM. None appeared from Department s sid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt has availed credit of whole of Service tax paid on the taxable services specified in sub-clause (zzg) of clause (105) of section 65 of the Act. The department slapped the appellant with a SCN alleging that he is not entitled to utilize 100% credit, instead he is entitled only 20% of the credit in terms of rule 6(3)(c). By holding so, the lower authority has not only confirmed the Service tax along with interest, but also imposed equal penalty under Section 78 and another penalty under Section 76 of the Act for late payment. For confirming the Service tax, the Assistant Commissioner has come to the conclusion that there is no difference between Rule 6(3) and Rule 6(5) and accordingly, he has concluded that the appellant is eligible only t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent from Rule 6(3) extends 100% credit to the service provider when these services mentioned therein are used for providing output service. The Assistant Commissioner has failed to notice that the credit of whole of Service tax paid on the taxable services - shall be allowed. Therefore, his order suffers form the basic defect. Since there is no dispute with regard to the services availed by the appellant, which has been specifically mentioned in Rule 6(5) there need no further discussion. Further, there is no allegation that the appellant is using the services exclusively for providing exempted services. In view of the above, I hold that the appellant is eligible to avail 100% credit. Since no case has been made out in view of the above dis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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