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TMI Blog2021 (11) TMI 339X X X X Extracts X X X X X X X X Extracts X X X X ..... as provided in the Rules viz. the difference between the sale price and the cost of goods sold (determined as per the generally accepted accounting principles without including the expenses incurred towards their purchase) or ten percent of the cost of goods sold, whichever is more. Thus, we find that the entire computation of demand in the instant case has been done without applying the legal provisions and hence the same cannot be sustained in our view. When the audit wing had already verified the books of accounts of the Appellant and had sought reversal of Cenvat credit of ₹ 1,82,114/- along with interest and penalty which was subsequently paid by the Appellant, then issuance of the instant SCN seeking reversal of Cenvat credit under Rule 6 of CCR 2004 by invoking extended period of limitation cannot be sustained. In view of the above discussions and the settled legal judicial precedence and provisions contained in statutes referred to above, the demand cannot be sustained and is therefore set aside. - Service Tax Appeal No.75642 of 2017 - FINAL ORDER NO. 75675/2021 - Dated:- 9-11-2021 - SHRI P.K. CHOUDHARY, MEMBER (JUDICIAL) AND SHRI RAJU, MEMBER (TECHNICAL) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lkata dated 24/10/2016 issued to the Appellant. However, the Appellant was in the meantime served with a Show Cause Notice based on the proceedings of anti evasion wing of the Service Tax Department alleging non reversal of Cenvat credit as per Rule 6 of the Cenvat credit Rules, 2004 (CCR 2004) as the Appellant was engaged in both provision of service as well as trading of goods which was an exempt service and hence the show cause notice was issued demanding 6% of the trading turnover as ineligible Cenvat credit availed by the Appellant during the period under dispute. The said SCN dated 17/10/2016 culminated into the impugned order. Hence the present appeal before the Tribunal. 3. Shri Ankit Kanodia, the learned Advocate, appeared on behalf of the appellant. He submitted that the present dispute is only in respect of the fact whether the Appellant is at all required to reverse any Cenvat credit under Rule 6 of the CCR, 2004 as confirmed by the Adjudicating Authority when the Service Tax Audit Department had already issued a final report to the Appellant stating the Cenvat credit eligible in this regard and the Appellant has already reversed the Cenvat credit stated to be inelig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Rule 6(3)(i) shall automatically apply. Two options have been provided under the law to the assessee. It is the choice of the assessee which option is to be availed. In the present case, the appellant admittedly availed the option available under Rule 6(3)(ii) read with Rule 6(3A). Therefore , the department cannot insist on availing the option of Rule 6(3)(i) and demand huge amount of money which is otherwise not payable by the appellant, nor it is part of Cenvat credit availed by the appellant. He submits that when the options have been provided, the assessee is at liberty to choose any of the options. Therefore in the present case, the appellant has opted for the option available under Rule 6(3)(ii) of Cenvat Credit Rules. The department has no role in deciding the options available under the Rules. It is his submission that the entire availment of Cenvat credit on provision of Business Support Services was within the knowledge of the department and that the same cannot be treated as common credit for the purposes of Rule 6 of CCR, 2004 as the same is directly in relation to the output service tax liability for its Mani Square unit. It is also submitted that the Anti Evas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii), how Revenue can insist that option (3)(i) under Rule 6 should be followed by the assessee. In the instant case of the Appellant, it is not disputed by the Revenue that the Appellant has availed Cenvat credit only to the extent of Rs. ₹ 41,17,269/- during the period under dispute. Hence, we are of the opinion that the demand as confirmed by the Adjudicating Authority cannot be sustained at all. 6.2 We further observe that the prayer of the Appellant regarding the calculation of the Department is correct as it is seen that the Department has mechanically applied 6% of the entire balance sheet turnover of the Appellant without detailing as to why the said turnover has been taken and why not the value of trading as provided in the Rules viz. the difference between the sale price and the cost of goods sold (determined as per the generally accepted accounting principles without including the expenses incurred towards their purchase) or ten percent of the cost of goods sold, whichever is more. Thus, we find that the entire computation of demand in the instant case has been done without applying the legal provisions and hence the same cannot be sustained in our view. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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