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TMI Blog2023 (7) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... he show cause notice was issued on 21.10.2014. In regard to the demand of CENVAT credit taken in excess of rule 6(3A) of the 2004 Credit Rules, the period of dispute is from July 2010 to March 2011. In regard to the demand of service tax short paid on excess baggage charges, the period of dispute is from April 2009 to March 2012. In the present case, the entire demand is for the extended period of limitation - in the absence of any challenge to this finding, the extended period of limitation could not have been invoked. When the entire demand proposed in the show cause notice is for the extended period of limitation, the demand proposed in the show cause notice has to be set aside, irrespective of the challenge by the department to the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt adopted rule 6(3A) of the CENVAT Credit Rules, 2004 2004 Credit Rules for availing CENVAT credit in proportion to the dutiable services it was providing. In terms of rule 6(3A), the assessee was required to reverse the CENVAT credit every month as per the ratio of dutiable and exempted services provided in the previous financial year, and then by 30th June of following year, re-computation of CENVAT credit was required to be done as per the ratio of current financial year. It was after this that differential amount, if any, was determined and adjusted. 3. For the months of April, May and June of financial year 2010-11, the respondent was reversing 95% of CENVAT credit each month, as adopted from the ratio of dutiable and exempted service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leviable to service tax. 6. However, a show cause notice dated 21.10.2014 was issued to the respondent, proposing the abovementioned demand of CENVAT credit and service tax, by invocation of the extended period of limitation contemplated under section 73(1) of the Finance Act with interest and penalty. 7. The respondent filed a detailed reply dated 14.09.2015 and denied the allegations made in the show cause notice. 8. The Commissioner, by order dated 31.03.2016, dropped the entire demand proposed in the show cause notice. The Commissioner framed the following three main issues to be decided: (i) Whether CENVAT credit was not allowable as per the provisions of rule 14 of the 2004 Credit Rules read with section 11A of the Central Excise Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the financial year as on 30th June and adjustment is required to be made for excess/shortage in reversal of Cenvat credit for exempted services and differential amount is determined to be payable or is adjusted against the final liability. Therefore, if a view is taken to apply the previous year s ratio, then in view of 6(3A)(h), no Cenvat would be available in the current year, if in the previous year 100% services were exempt. Further, as per Rule 6 (3A)(g) of the Cenvat Credit Rule, 2004 information for adjustment is required to be given to the department within 15 days from the date of such adjustment. The assessee had made the adjustment of tax on 30/06/2012 and accordingly informed the department on 12/7/2012 (within 15 days from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces, there would be no change in the number of tickets and the service tax amount would be no change in the number of tickets and the service tax amount would remain the same. I agree with this contention of the assessee and hold that the demand of Rs. 4.01 crores raised by the department in relation to excess baggage charges collected from passengers is not sustainable and hence requires to be dropped. 11. With respect of the third issue relating to the invocation of the extended period of limitation under section 73(1) of the Finance Act, the Commissioner observed as follows: In view of the discussions in the aforesaid paras extended period of limitation cannot be invoked. 12. In the present case, the show cause notice was issued on 21.10 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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