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TMI Blog2019 (10) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... exempted and taxable services and hence should not have utilized CENVAT credit in excess of twenty per cent of the Service Tax payable what they did. Ld. Counsel agrees that they have not maintained separate records but asserts that the twenty per cent limit under Rule 6(3)(c) pertains only to the CENVAT credit on inputs/input services and not CENVAT credit on capital goods. The SCN has wrongly demand the total amount of CENVAT credit including that on the capital goods. It is the view of the Learned Commissioner that in the absence of any specific restriction, Rule 6(3) (c) applies to the entire CENVAT credit and not just to the CENVAT credit on inputs/input services. However, in the absence of specific details, we are unable to dete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use in providing output service shall utilize CENVAT credit to the extent of an amount not exceeding twenty per cent of the amount of Service Tax payable on the taxable output service. It is alleged that during the period March 2005 and September 2005, the appellants have utilized CENVAT credit in excess of its twenty per cent limit. Therefore, the SCN proposed to recover the excess CENVAT credit so utilized amounting to ₹ 86,79,806/- from the appellant along with interest under proviso to Section 73(1) of the Finance Act, 1994 read with Rule 14 of CCR, 2004. It also proposed to demand interest on the aforesaid amount and impose penalties under Section 77 78 of the Finance Act, 1994. The Ld. Adjudicating authority confirmed the dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e limitation under Rule 6(3)(c) applies to them. They have not utilized CENVAT credit of input or input services in excess of twenty per cent of the Service Tax paid during the relevant period. However, in the SCN, the Department has erroneously taken CENVAT credit on the capital goods also while calculating the aforesaid twenty per cent. If this component is removed, they are well within the twenty per cent limit and therefore the entire demand has to fail on this account. He would rely on the CBEC Circular No.137/203/207-CX-4 dated 01.10.2007 which clarifies as follows: 2. The matter has been examined. The basic purpose of identifying 17 specified services for special dispensation is that these services are used in relation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cular of CBEC that the limit of twenty per cent applies only to the CENVAT credit availed on inputs and input services and not to the capital goods credit. He further relies on the case laws of Idea Cellular Ltd. Vs Commissioner of Central Excise, Rohtak [2009 (16) STR 712 (Tri. Del.)] in which the Principle Bench of the Tribunal has held that the capital goods credit is not covered by Rule 6(3)(c). Further, in the case of BSNL Vs Commissioner of Central Excise, Lucknow [2019 (5) TMI 512- CESTAT ALLAHABAD] identical decision was given. He would submit that in view of the above, the case is covered clearly in their favour and the appeal needs to be allowed and the impugned order set aside. 5. On his specific query from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e credit of inputs or input services. Further, in the absence of any specific exclusion to any specific credit, it appears to be proper and just to understand the meaning of CENVAT credit as inclusive of all credits. Thus, excluding any specific credit, credit of capital goods, is unintended by Rule and hence the restriction imposed by Rule 6(3)(c) on credit utilization by output service provider to the extent of 20% is applicable to the total sum of all credits and cannot exclude any specific credit. 7. We have considered the arguments of both sides and perused the records. It is not in dispute that the appellant has provided both taxable and exempted services and has availed CENVAT credit. The SCN alleges that they have not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no longer res integra and it has been decided by the Principal Bench of the Tribunal in the case of Idea Cellular Ltd. (supra) and by the Allahabad Bench of the Tribunal in the case of BSNL (supra) that the twenty per cent restriction in Rule 6(3) (c) applies only to the credit on inputs/input services and not to the credit on capital goods. 9. However, in the absence of specific details, we are unable to determine whether the appellant has exceeded the limit of twenty per cent of inputs/input services credit or not. Hence, we find that this is a fit case to be remanded to the original authority for the limited purpose of examining whether the appellant has exceeded the limit of twenty per cent of the inputs/input service cre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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