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TMI Blog2023 (2) TMI 607X X X X Extracts X X X X X X X X Extracts X X X X ..... ne to one co-relation is not required for taking Cenvat credit under Rule 3 of CCR. Once credit have been rightly taken, there is no restriction in use of such credit for payment of either central excise duty or service tax or any other specified tax liability. Further, Rule 6(5) of CCR provides that the provisions of Rule 6(1), (2) and (3) are not applicable, where input service received is used both for providing taxable and tax free output service. Admittedly, in the facts of the present case, appellant have utilised the input consultancy engineering service both for providing tax free output service of passenger transport and taxable output service of consultancy engineering service. Accordingly, the demand of disallowance of Cenvat credit of Rs. 6,17,84,781/- is set aside. Disallowance of Cenvat credit with regard to input service received at the unregistered offices of the appellant located in other cities like Hyderabad, Chennai, Pune etc. - HELD THAT:- It is admitted fact that such offices were opened by the appellant for providing output taxable service of engineering consultancy service. Further, Admittedly, appellant have accounted for the receipt of output taxable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for rendering taxable output service and tax free services, further Rule 6(5) provides that notwithstanding anything contained in sub-Rule 1, 2 3. Thus, credit of the whole of service tax paid on the input consultancy service, which is one of the specified taxable services shall be allowed unless such service is used exclusively in or in relation to the rendering of exempted output service. Thus, credit of the whole of service tax paid on the input consultancy service, which is one of the specified service under Rule 6(5) of CCR, will only be allowed if the assessee uses this service for rendering both taxable and exempted service. It further appeared to revenue that the input consultancy service was received towards construction of Delhi Metro phase-1 and phase-2 and, thus credit during this construction period is not available on the pretext that appellant was enriching their knowledge and experience for rendering output consultancy service. Further, as per Rule 2 (l) of CCR, input service means any service used by provider of taxable service for providing an output service. Hence, the availment of input consultancy service amounting to Rs. 6,17,84,781/- appeared to be irre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itions precedent under the Cenvat Credit Rules. It was further contended that credit taken was on the strength of invoices addressed to the other office(s) of the appellant is correct, as the appellant have got centralised registration for service tax purposes. Further urged that being registered is not a condition precedent for taking credit. 6. The SCN was adjudicated by the principal Commr. of service tax vide Order-in-Original dated 28.07.2016 confirming the demand of Rs. 6,17,84,781/- holding the Cenvat credit of consultancy engineering service as the inadmissible, availed during April, 2004 to August 2007. Out of the proposed demand, for irregular invoices of Rs. 66,17,317/-, the truncated amount of Rs. 5,22,936/- was confirmed as inadmissible, received during the period 2006-2009. Further, equal amount of penalty Rs. 6,23,07,717/- was imposed under Section 78. Penalty under Section 76 was dropped and demand of Rs. 60,94,381/- was also dropped. 7. Being aggrieved, the appellant is before this Tribunal. 8. Learned Counsel for the appellant, Mr. P.K. Sahu, Advocate inter alia urges the following submissions/grounds:- Show Cause Notice received beyond limitation pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extended period even on the date of the SCN. Disallowance of cenvat credit on consulting engineer s services 8.4 The appellant, while implementing, Delhi Metro project, had obtained consulting engineer s service. While utilising such consultancy for Delhi metro rail project, it had acquired knowledge to give consultancy service for similar projects. It had utilised the input tax credit for paying service tax on the output consulting engineering service. The Pr. Commissioner has held that the appellant had availed cenvat credit of Rs.6,17,84,781 on ineligible input services. This is on the ground that the appellant had received consulting engineering services, which were specific to Delhi projects and had been used for exempted service (passenger transport) exclusively. Therefore, the appellant cannot claim that the appellant has used such input service for providing consulting engineering services to other metro projects. 8.5 The appellant submits that consulting engineering services received by the appellant has a nexus with the consultancy engineering services rendered by it to other metro projects in other cities which are being executed in similar manner. Knowledg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lised cenvat credit of Rs.6,17,84,781 during 2006-09. The Pr. Commissioner has ignored the documents supplied by the Superintendent (Adj.) to the appellant along with his letter dated 03.12.2015, wherein it is clearly stated that out of the alleged irregularly availed cenvat credit of Rs.6,17,84,781, only Rs.13,23,207 falls in this notice period (page 129 of appeal memo). The balance amount was yet to be availed. It seems the same has been included in the subsequent SCN. Therefore, the demand cannot exceed Rs.13,23,207. Ineligible cenvat credit on invoices issued to non-registered offices. 8.9 The Pr. Commissioner has given divergent findings while disallowing the cenvat credit of Rs.5,22,936. Firstly, she has denied the credit on the ground that cenvat credit cannot be taken on the strength of invoices issued to non-registered premises of the appellant. But in the subsequent paragraph, she has denied the credit by holding that cenvat credit cannot be availed by registered premises when cenvat credit is actually availed and utilised by unregistered office. There is nothing in the law that disentitles the appellant from taking cenvat credit on the strength of invoice issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utable to taxable output of goods or service. Further Rule 6(3) provides that if an assessee does not maintain separate accounts but is taking credit of common input or service utilised both for taxable and tax free output services, then the assessee is required to pay specified amount (6% or as applicable) on the exempt turnover. Further, Rule 6(5) of CCR provides that notwithstanding anything contained in sub-Rule (1) (2) (3) of Rule 6, credit of the whole of service tax paid on 17 taxable input services, (as specified), shall be allowed unless such services are used exclusively in or in relation to manufacture of exempted goods or providing exempted services. Thus, appellant is entitled to Cenvat credit of the whole of engineering consultancy service (which is one of the 17 specified services), if this service is used both for taxable and exempted services. 12. Learned AR further, on the ground of limitation, urges that Section 37 (C) of Central Excise Act deals with the issue of-service of notice/orders etc. The section provides various methods of service. As per the department, the SCN dated 19.10.2010 was dispatched under office dispatch no. 11839 dated 19.10.2010 by s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit resulting in evasion of payment of service tax. Further, under the facts and circumstances, there was suppression as well as contravention by the assessee. Had the audit not detected the error, the applicable tax liability would have escaped. Thus, appellant have not disclosed true facts to the department, as regards, taking and utilisation of inadmissible Cenvat credit. Accordingly, extended period of limitation have been rightly invoked under the proviso to Section 73(1) of the Finance Act. 14. As regards the Cenvat credit of Rs. 6,17,84,781/- on Consulting Engineering Service, issue have been concluded in para 5.3 of the impugned OIO, that the assessee have taken credit of this amount till August, 2007 and out of this, Cenvat credit of Rs. 13,23,207/- was availed during the month of August 2007, and balance was available to be availed Rs. 6,04,61,574/-. Further urges that as appellant have utilised the input service of consulting engineering service, in construction of its metro network in and around Delhi, they were not entitled to take credit of the same for providing the output service of consulting engineering service provided to other metro projects in other citie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in other cities like Hyderabad, Chennai, Pune, Kolkata etc. For providing this service, appellant have also set up offices in those cities. Rule 2(l) of CCR provides input service means any service used by provider of output service for providing an output service. This rule further provides that such input service may have been used by the manufacturer/service provider either directly or indirectly. Thus, one to one co-relation is not required for taking Cenvat credit under Rule 3 of CCR. Once credit have been rightly taken, there is no restriction in use of such credit for payment of either central excise duty or service tax or any other specified tax liability. Further, Rule 6(5) of CCR provides that the provisions of Rule 6(1), (2) and (3) are not applicable, where input service received is used both for providing taxable and tax free output service. Admittedly, in the facts of the present case, appellant have utilised the input consultancy engineering service both for providing tax free output service of passenger transport and taxable output service of consultancy engineering service. Accordingly, we allow this ground in favour of the appellant and set aside the demand of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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