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TMI Blog2023 (8) TMI 738X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017 (7) TMI 293 - CESTAT MUMBAI] has dealt with an identical issue and the Bench, after considering a catena of decisions, has held denial of abatement would be an act of encroachment by taxing sale of goods which is beyond the scope of legislative authority. To avoid such encroachment, erasure of credit is the only option. There is no allegation that such erasure has lead to deficiency of available credit at any time. Erasure would thus be substantial compliance and hence denial of abatement in the impugned order is not tenable. Coming back to the case on hand, the Assistant Commissioner records the reply of the appellant that they had reversed certain amount of CENVAT Credit by adopting the procedure given under Rule 6(3AA) (sic), but however, the same is not accepted for the reason that abatement is not exemption - it is also not found from the statute any distinction being made, as done by the adjudicating authority, but the facts borne on record clearly reflect the action in good faith by the appellant in reversing voluntarily before claiming abatement, which is the condition precedent in terms of the abatement Notification. Thus, the denial of abatement by the autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the appellant was availing CENVAT Credit on the input services, though it had not fulfilled the conditions prescribed under the said Notification and therefore, the assessee was ineligible to avail the abatement provided under the said Notification for the period from July 2012 to June 2017, and that the assessee was consequently liable for payment of Service Tax on the entire taxable value without abatement in terms of Section 67 of the Finance Act, 1994. 1.4. In the said Show Cause Notice, the demand was quantified at Rs.36,16,412/- for wrong availment of the exemption, by means of abatement under the above Notification and, for the said reason, the Show Cause Notice also revealed that the action of the assessee required invoking the extended period of limitation under Section 73(1) of the Finance Act, 1994. It was thus pointed out in the Notice that but for the audit team finding out the wrong availment of abatement and consequent short payment of Service Tax, the same would have gone unnoticed and therefore the assessee had deliberately mis-declared material facts with an intent to evade payment of correct Service Tax. 1.5. A further perusal of the Show Cause Notice a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch as business support, service, clearing and forwarding agent service and rent-a-cab service. In the reply filed by the noticee, they have claimed to have reversed certain amount of CENVAT Credit by adopting the procedure given under Rule 6(3AA) of the CENVAT Credit Rules, 2004, for providing both dutiable and exempted services namely, abatement availed on 'renting of motor vehicle'. Rule 6(3AA) is not applicable to the assessee's case which will not justify the act of availing abatement under the said Notification since the same cannot be equated to providing an exempted service. 4. Seriously aggrieved by the order of the Assistant Commissioner dated 22.02.2019 whereby the demand proposed in the Show Cause Notice came to be confirmed along with the applicable interest and penalty, they appear to have preferred an appeal before the first appellate authority, and the first appellate authority also not accepting their appeal, the present appeal has been filed by them before this forum. 5.1. Shri M.N. Bharathi, learned Advocate appearing for the appellant, argued before us that in the first place, with regard to car hire charges, that the appellant di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve considered the rival contentions and we have also gone through the documents placed on record. 8. After hearing both sides, we find that the only issue to be decided by us is: whether the appellant's claim for abatement in terms of Notification No. 26/2012-ST dated 20.06.2012 is correct? 9. The issue of abatement is an indirect way of granting exemption to the extent prescribed in the statute and abatement is not normally denied on mere surmises or on any allegation of insufficient credit, considering the scheme of CENVAT Credit. But in any case, the Notification granting the benefit of abatement does not exempt wholly or partially the rate of tax and therefore, no such rigorous exercises are required to be employed, unlike in cases of exemption notifications. That is to say, the abatement Notification merely sanctifies the deduction in the assessable value of taxable services, the availment of CENVAT Credit is a caveat for eligibility to claim abatement. 10.1. It has been held in the orders of various Benches of the CESTAT, namely: - (i) Khyati Tours Travels v. Commissioner of C.Ex., Ahmedabad [2011 (24) S.T.R. 456 (Tri. - Ahmd.)] (ii) Travel INN India P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same. In the circumstances, when there is an admitted position emerging from the record, we are of the view that the Tribunal erred in law in reversing such a conclusion in the Order-in-Original. The Tribunal, in reversing this order, relied upon the cases and which have been brought to our notice. We must note them and in some details. held that reversal is sufficient compliance with condition of non-availment. Though the decision of the Tribunal in Mysore Sales International Limited v. Commissioner of Central Excise, Customs and Service Tax, Bangalore LTU [2014-TIOL-1950-CESTAT-BANG] pertains to the same abatement notification, the issue confronting the Bench was the failure on the part of the assessee to evince proof of not having availed credit; in the matter before us, the allegation of reversal not being sufficient compliance establishes that the credit taken had, indeed, been erased. 19. We do not have to go beyond the law laid down by the Hon'ble High Court of Rajasthan in Commissioner of Central Excise, Jaipur-I v. Sanjay Engineering Industries [2016 (43) S.T.R. 354 (Raj.)] which, relying upon the decision of the Hon'ble High Court of Gujarat in Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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