2017 (4) TMI 588

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..... s paid due to the reason either it attracts nil rate of duty or exempted service. The adjudicating authority confirmed the demand under Cenvat Credit Rules on the following points. (i)      The appellant availed the Cenvat credit on the input services used in providing taxable as well as exempted service. As per Rule 6(3)(c) of Cenvat Credit Rules. The appellant is entitled to utilize Cenvat credit only to the extent of 20% whereas they have utilized Cenvat credit in excess to 20% , the said excess utilized Cenvat credit was demanded. (ii)    The appellant availed Cenvat credit on the input services which was used in the exempted as well as taxable service and not maintained separate account accordi .....

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..... of interest but excess utilization cannot be treated as duty demand. In this support, he relied upon the Tribunal decision in the case of Federal Express Corporation v. Commissioner of Service Tax - 2014 (36) S.T.R. 375 (Tri.-Mumbai). As regard the period post on 1-4-2008 the demand was confirmed on the ground that the assessee have availed Cenvat credit in respect of input service which was utilized in taxable and non-taxable services. Accordingly the appellant is liable to pay 8%/6% of the exempted goods. In this regard, he submits that the appellant have admittedly foregone the Cenvat credit in respect of the part of the input service which has been used in the exempted services. The foregone Cenvat credit is on proportionate basis there .....

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..... that even if the appellant utilize excess credit in a particular month/period there will be a short utilization in the subsequent month this will amount to deferment of payment from cash from particular month to the subsequent month, this factual aspect was not looked into by the adjudicating authority. As per the judgment relied upon by the ld. Counsel, in this regard excess utilization will result into only demand of interest for the period of deferment of payment from cash due to excess utilization of the Cenvat credit. In view of this fact, the fact that how much excess utilization in a particular month and what will be impact in the subsequent month and accordingly the delay in payment from cash needs to be verified. As regard the dema .....

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