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TMI Blog2021 (3) TMI 1050X X X X Extracts X X X X X X X X Extracts X X X X ..... tisement in print media is specifically covered under the negative list in terms of Section 66D of the Finance Act, 1994 and therefore the same cannot be said to be an exempted service and the provisions of Rule 6(3) is not applicable to an activity which is in the negative list. Further, the appellant during the stage of the audit itself has produced record before the audit saying that appellant has duly prepared separate accounts for cenvat credit availed in respect of taxable service, common credit availed for exempted services and taxable services. CENVAT Credit - input services - Air travel - accommodation charges - taxi hire charges - AMC for flat at Delhi - HELD THAT:- As far as Air travel/visa, accommodation and AMC for flat at Delhi is concerned, keeping in view the nature of output service rendered by the appellant the employees have to travel to places to organize business exhibitions and events and hence the travel is in relation to the output service provided and moreover these services have been held to be input service in the case of M/S EMCON TECHNOLOGIES INDIA PVT LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE, BANGALORE [ 2012 (11) TMI 1019 - CESTAT BANGALORE ] . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... like internet charges, mobile/telephone charges, air fare, taxi hire charges, travelling expenses, server hosting charges, courier charges, stationary etc. as eligible credit in terms of CCR, 2004. Audit was conducted by the Audit Commissionerate for the period October 2011 to September 2015 during July and August 2016 wherein the following discrepancies were noticed- i. It is alleged in the show-cause notice that appellant was engaged in both taxable as well as exempted services and have not maintained separate accounts for availing cenvat credit as per Rule 6(2) and have neither reversed proportionate credit under Rule 6(3A) of CCR, 2004. Therefore, appellant is liable to reverse credit availed on exempted services as per Rule 6(3)(i) @ 6/7%. ii. Resultantly, on non-payment of amount as per Rule 6(3)(i) CCR, 2004 in respect of common input services used for exempted services [as alleged in para 6.2 of show-cause notice, service tax was demanded amounting to ₹ 44,22,026/- (Rupees Forty Four Lakhs Twenty Two Thousand and Twenty Six only)]. iii. It is further alleged that appellant has wrongly availed cenvat credit on input services which are not covered within the ambit of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act of the matter is that the appellants for each Division has accounted income and expenditure separately and therefore requirement for maintenance of separate accounts for credit attributed towards taxable, exempted and common credit is complied as per Rule 6(2). He also submitted that because of the maintenance of separate account, it was possible for the appellant to identify credits attributable towards common and taxable services. He further submitted that for the sake of assuming but not admitting that sale of space is an exempted service even then the appellant has reversed cenvat credit amounting to ₹ 60,672/- (Rupees Sixty Thousand Six Hundred and Seventy Two only) along with interest as computed under Rule 6(3A) of CCR, 2004 on the proportionate common credit vide general voucher No. 267 dated 14/09/2016 along with interest of ₹ 41,637/- (Rupees Forty One Thousand Six Hundred and Thirty Seven only) vide challan No. 00074 dated 21/09/2016 and the fact of proportionate reversal is also noted in para 14.2.6 of the Order-in-Original. He further submitted that for considering the proportionate reversal of credit in their revised computation, the appellant has cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it with interest at the point of audit inquiry, show-cause notice should not have been issued in terms of Section 73(3) of the Finance Act, 1994. For this, he relied upon the decision in the case of CCE Vs. M/s. Adecco Flexion E Workforce Solutions Ltd. 2012 (26) S.T.R. 3 (Kar.). As far as second issue involved in the present case is whether the appellant is entitled to avail the cenvat credit on input services which has been denied by the Department. The impugned order disallowed cenvat credit amounting to ₹ 1,60,095/- (Rupees One Lakh Sixty Thousand and Ninety Five only) availed in respect of Air Travel/Visa Charges, Taxi Hire Charges, Accommodation Charges, AMC for flats and telecom charges on understanding that they are not covered within the definition of input services in Rule 2(l) of the CCR, 2004 and does not bear any nexus with the output services. In this regard, appellant submitted that he was under bonafide belief that services on which cenvat credit availed are directly attributable to the output service and thus eligible. He further submitted that appellant has not collected or recovered cost of such services from the employees and to that effect he has also att ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice was issued on the basis of departmental audit undertaken for the period October 2011 to September 2015 and all the facts were already within the knowledge of the Department. For this, he relied upon the following decisions: LANDIS + GYR Ltd. Vs. CCE - 2013 (290) E.L.T. 47 (Tri.-Kolkata) GAC Shipping India Pvt. Ltd. Vs. CCE 2017 (49) S.T.R. 242 (Tri.-Bang.) BHEL Vs. CCE ST 2020 (43) GSTL 395 (Tri.-Hyd.) 4.3. As far as interest and penalty is concerned, the appellant submitted that they have already reversed proportionately common credits, hence there is no short payment or non-payment of service tax under Rule 6(3)(i) of CCR, 2004. Hence, no interest and penalty is payable. 5. On the other hand, the learned AR reiterated the findings of the impugned order. 6. After considering the submissions of both the parties and on perusal of the material on record, I find that the issue for consideration in the present appeal is (a) applicability of Rule 6(3) of CCR, 2004 to exempted activity of sale of space or time for advertisement in print media (b) inadmissible cenvat credit of input services availed in respect of Air travel, accommodation charges, taxi hire charges, AMC for flat at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s per Rule 6(3A), appellant was only liable to reverse an amount of ₹ 54,772/- (Rupees Fifty Four Thousand Seven Hundred and Seventy Two only) whereas he had already reversed during the audit ₹ 60,672/- (Rupees Sixty Thousand Six Hundred and Seventy Two only) along with interest. In view of the above discussion, with regard to issue no. (1) I hold that appellant has complied with the requirement of 6(3A) by reversing the amount which was required to be reversed. As far as wrong availment of credit on input service is concerned, I find that as far as Air travel/visa, accommodation and AMC for flat at Delhi is concerned, keeping in view the nature of output service rendered by the appellant the employees have to travel to places to organize business exhibitions and events and hence the travel is in relation to the output service provided and moreover these services have been held to be input service in the case of Emcom Technologies Pvt. Ltd. and Fine Care Biosystems and Goodluck Steel Tubes Ltd. (cited supra.). 6.1. Further, I find that when the accommodation bears a direct nexus with the output service, hence the AMC charges for the flat will also fall within the input ..... X X X X Extracts X X X X X X X X Extracts X X X X
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