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TMI Blog2023 (6) TMI 701X X X X Extracts X X X X X X X X Extracts X X X X ..... he adjudicating authority is clearly functus officio, he concludes to hold that the appellant are not maintaining separate books of accounts for taxable and exempted services - The authority should have gone strictly by the facts and documents as available, since it is well understood that each year is independent and the facts may vary. Hence, it cannot be accepted that the above conclusion of not maintaining separate accounts which is a baseless allegation made without proper application of mind. The demand proposed in the Show Cause Notice and that which was confirmed in the impugned order, are not sustainable, for which reason the same deserves to be set aside - Appeal allowed. - Service Tax Appeal No. 703 of 2012 - FINAL ORDER NO. 40434 / 2023 - Dated:- 15-6-2023 - HON BLE MR. P. DINESHA , MEMBER ( JUDICIAL ) And HON BLE MR. VASA SESHAGIRI RAO , MEMBER ( TECHNICAL ) Shri Raghavan Ramabadran , Advocate for the Appellant Smt. K. Komathi , Additional Commissioner for the Respondent ORDER Order : [ Per Hon ble Mr. P. Dinesha ] This appeal is filed by the assessee against the Order-in-Original No. LTUC/303/2012-C dated 24.09.2012 passed by the Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various services which were common services for both taxable services as well as traded goods, (ii) for which no separate books were maintained by the appellant, (iii) that the portion of common services and other services exclusively used for their trading activity did not qualify as an input service since the same were not used in providing output service within the meaning of Rule 2(p) of the CCR, 2004 and also, (iv) that trading was not covered under the definition of output service for which reason any input service used for trading activity did not qualify as input service under Rule 2(l) ibid. for the purposes of availment of credit, it was proposed vide the above Show Cause Notice to demand and recover an amount of Rs.2,36,03,621/-, being the input service credit wrongly availed by the appellant, apart from applicable interest and penalty under Rule 15 (1) ibid. 3. The appellant appears to have filed a detailed reply justifying its stand, but however, not fully satisfied, in the adjudication, the Adjudicating Authority has proceeded to confirm the demand to the extent of Rs.21,76,056/- under Rule 14 of the CCR, 2004 read with Section 76 (1) of the Finance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services and hence, no demand having been raised under Rule 6, the impugned order is not sustainable. (vi) Rule 14 ibid. could not have been invoked since there is no recovery provision provided under the said rule for denying the credit pertaining to an activity which is neither a service nor a manufacturing activity. (vii) He would rely on an order of the co-ordinate Allahabad Bench of the CESTAT in the case of M/s. LG Electronics India Pvt. Ltd. v. Commr. of Cus., C.Ex. S.T., Noida [2017 (3) G.S.T.L. 249 (Tribunal Allahabad)] (viii) Without prejudice to the above contentions on merit, he would also dispute the quantification of demand on the ground that the appellant had already reversed the credit which was in excess. (ix) In respect of common input services, the Revenue has sought to recover the entire credit pertaining thereto vide parallel proceedings and hence, there is overlapping of the demands. 7.2 He would further submit, referring to an earlier order of this Bench in the appellant s own case [Final Order No. 42732 of 2018 dated 30.10.2018 CESTAT, Chennai], a copy of which is placed at page 54 of the compilation of case-law filed, to contend that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. In their written submissions filed on 27.06.2012, Sify, interalia stated as under: No input service credits used exclusively in trading activity had been availed and the said activity is carried out only in Enterprise services SBU during the course of provision of networking and other erection services on which service tax had been paid. Further only common input service credit is to be taken for quantification, as the Department has accepted the fact that they are maintaining separate books of accounts for taxable and exempted services and hence the demand worked out in the notice was incorrect. Since only 4 SBUs viz. 12, 15, 51 58, indulge in trading activity, the credit taken in these SBUs alone should be considered for proportionate reversal and not the entire credit availed in other SBUs rendering purely taxable services. Accordingly credit attributable to trading would only work out to Rs.67.42 lakhs as against the demand of Rs.2.36 crores proposed in the notice and that they had already reversed Rs.31 lakhs of this amount. 13.1 It is seen from the records that, though separate ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect, the demand proposed in the show cause notice is in order. 12.1 It is very clear from the above that the stand of the Revenue is volatile, that is to say, from the findings of the Commissioner in the impugned order, the proposed demand in the Show Cause Notice did not have any legal sanctity as the same, apparently, was not as per the law as prevalent during the period in dispute. Moreover, at paragraph 4, which is extracted hereinabove, there is a mention about the claim of the appellant to have maintained separate accounts in respect of input services utilized for taxable and exempted services. There is also on record the submissions of the appellant, duly extracted at paragraph 6 of the impugned order, and from that, the two following vital points emerge: - No input service credits used exclusively in trading activity had been availed and the said activity is carried out only in Enterprise services SBU during the course of provision of networking and other erection services on which service tax had been paid. Accordingly credit attributable to trading would only work out to Rs.67.42 lakhs as against the demand of Rs.2.36 crores proposed in the notice and that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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