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TMI Blog2020 (7) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appellant have already reversed an amount of 59,43,283/- out of disputed credit for the period October 2007 to December, 2012; the learned Commissioner has erred in holding that banking and financial services, credit rating services are not used for providing output services; such services are required to raise funds, which is essential to carry out the business of the appellant and hence the same is held to be eligible service; as regards the allegation that certain processing charges/banking service was related to GMR Infrastructure Limited (subsidiary company) as reflected in additional credit arrangement letter of the bank, whereas the invoice is in the name of the appellant towards loan processing fee; as the appellant company benefits from profitability and working of subsidiary company, thus the banking and financial charges are eligible input service in respect of the appellant - there is no specific reason assigned for disallowance of Cenvat credit for other input services by the learned Commissioner. Penalty - HELD THAT:- There are no case of suppression, fraud, etc. is made out against the appellant; further, admittedly appellant have maintained proper books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipt, consumption and inventory of input services for provision of taxable output services and for provision of exempt services, as well as for utilization; thus, the appellant/assessee appeared liable to pay an amount attributable to the Cenvat credit on inputs services used in the exempt output services, at the specified rate in Rule 6(3) of CCR, for the period 1.4.2008 to 31.3.2012; the Revenue calculated the amount payable as below: Sl. No. Period Value of exempted services provided Rate of Cenvat credit to be reversed Amount to be Reversed A B C D 1. 2010-11 ₹ 3,84,30,39,918 6 ₹ 23,05,82,395 2. 2011-12 ₹ 8,80,58,22,801 5 ₹ 44,02,91,140 Total ₹ 67,08,73,535/ Year Year Total value of exempted service Total of taxable + exempted services Credit Availed Credit attributable to exempted services E F G H=E/F*G 2010-11 3843039918 532,21,47,891 13,99,06,759 10,10,24,487 2011-12 8805822801 13324055000 14,48,86,575 9,57,41,168 Total 12648862719 186462028912 284772334 19,67,65,654 * In reply to the audit objection, the appellant had stated that they have already reversed proportionate Cenvat credit amounti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... propriated) 3. Cenvat Credit disputed 3(a) credit double availed disallowed 5,81,31,723 (rev. 59,43,283) 7,58,737 (Reversed) (Appropriated) 3,39,24,571 4. Penalty 76 Under Section 77(2) Under Section 78 Not imposed 10,000/- 3,77,03,006 Not imposed 10,000/- 7,04,71,970 (not proposed in SCN) 5. Penalty under Rule 15(3) of CCR 7,58,737 5,81,31,723 Nil 5. The learned Counsel for the appellant Shri Anil Kumar Kathuria assailing the impugned order makes the following submissions and grounds: 5.1. Learned Commissioner has mis-construed in holding that the toll plaza, administrative building, rest room/area are not part of the road; admittedly, construction of road is exempt; the appellants have constructed road under tender awarded by NHAI and Government of Tamil Nadu to "M/s GMR Chennai Outer Ring Road Pvt. Ltd.'; on Design, Build, Finance, Operate and Transfer Mode (DBFOT), M/s Buoyance Infrastructure limited were appointed as engineering, procurement and construction contractors ("EPC Contractor"); the activity involved design, build, finance, operate thereafter transfer back to the Government, after number of years as stipulated; construction of toll plaza, rest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal works connected with the CONTRACT as per the specifications mentioned in the CONTRACT including Tender Documents/Specification/Drawings etc. b) GIL-EPG is understood to have satisfied himself by due careful examination before signing this sub contract Agreement as to the contents of the CONTRACT, the nature of the ground and sub-soil, the form and nature of the site, the quantities and nature of the work, the materials and equipments etc., necessary for completion of the work and power required for the execution of the Project, the accommodation he may require for itself and its employees/workmen and all the other matters incidental thereto and ancillary thereof effecting the execution and completion of the Project. c) Unless otherwise agreed upon, it is the sole responsibility of GIL-EPC to submit to SPV and BIPL any drawings, samples of materials, invoices, vouchers, specifications, working instructions, any specific documents etc. at his cost for the fulfillment of the CONTRACT. d) GIL-EPC shall be liable to abide by the terms and conditions of the CONTRACT. A copy of the CONTRACT is annexed hereto as Annexure "1' ………………&hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23/- Learned Counsel submits that Rule 2(l) of CCR provides for the scope of credit on input service allowable to a provider of output service which are used by him in providing the output service, whether directly or indirectly, in or in relation to the manufacture of final products and includes services, used in relation to setting up, modernization, used in premises of provider of output service or an office relating to a factory or premises etc. etc. and makes specific exclusion with respect to certain services in the exclusion clause (A) to (C), being input service for construction or execution contract of a building or civil structure etc. There is no specific exclusion for the input services in dispute and the same have been received and used in providing output services. Accordingly, prays for allowing this ground. Learned Authorised Representative for Revenue have relied upon the impugned order and supports the disallowance. 10.1. Having considered the rival submissions, we find that all the aforementioned services have been used by the appellant in providing output service and thus eligible under the definition of input service under Rule 2(l) of CCR; from the facts on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also liable to be set aside; Learned Counsel further points out that Section 78 was not invoked in the show cause notice dated 31.5.2014 for the subsequent period. We are not inclined to accept the argument of Learned Authorised Representative reliance on the impugned order for upholding of the penalty. 12. Considering the rival contentions, we find that no case of suppression, fraud, etc. is made out against the appellant; further, admittedly appellant have maintained proper books of accounts and registers of the transactions and also regularly filed the ST-3 returns and paid the admitted taxes; further, appellant deposited substantial amounts by way of reversal or deposit at the time of audit which have been appropriated in the impugned order; Amount reversed/paid matches the disallowed amount; under such circumstances, we hold that penalty under Section 78 is not attracted. Accordingly, the same is set aside; penalty under Section 77(2) of the Finance Act is also not attracted, hence set aside. 13. Another ground raised is in regard to classification of service for the period from 1.6.2007, it appears that Revenue holds that the services to be classifiable as "construction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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