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TMI Blog2024 (6) TMI 507X X X X Extracts X X X X X X X X Extracts X X X X ..... by the appellant was not proportionately reversed by the appellant. But on pointing out by CERA audit, the appellant has reversed the same. The same has been recorded by the adjudicating authority in the impugned order. As the fact of proportionate reversal of cenvat credit is on record and no credence was done by the adjudicating authority to the said fact, therefore, the impugned order is not sustainable in the eyes of law. It is found that as the appellant has already reversed the proportionate cenvat credit attributable to exempted services, in that circumstances, the appellant is not required to pay any amount equal to 5%/6% of the value of the exempted services. The same view has been taken by this Tribunal in the case of M/s Chryso India Private Limied Vs. Commissioner of CGST Central Excise, Kolkata North [ 2023 (5) TMI 596 - CESTAT KOLKATA] , wherein this Tribunal has observed ' even prior to Rule 6 (3AA) coming into effect from 01/4/2016, they have been taking the view that mere non filing of the option letter should not be used to deprive the assesssee from reversing the proportionate Cenvat Credit. The very fact that the Rule 6 (3AA) has been brought into effect fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut service i.e. transaction charges being a common input service, proportionate reversal was not done due to omission by the appellant, which was done during such audit by CERA. 2.3 Again in 2013, the appellant intimated to the Range Superintendent that the transaction charges introduced since 2009 was common and proportionate cernvat credit was reversed during CERA Audit. In case of all other input services, proportionate cenvat credit reversed regularly and found in order by CERA and Departmental audits in previous years. 2.4 In these set of facts, it was alleged that the appellant has taken cenvat credit on common input services used in exempted as well as taxable services and involving non-payment of claim at applicable rate of value on exempted services in terms of Rule 6 (3) and 6 (3B) of the said Rules. On scrutiny of ST-3 Returns as well as cenvat credit records, it revealed that the appellants have taken cenvat credit on common input services i.e. rent, banking, telephone, repair maintenance, insurance, postage courier, audit fees, internet broadband services, professional fee, software charges etc. These input services are used for providing output services, which are cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit Rule, 2004. He further submits that as the CERA audit was conducted and the discrepancy has been pointed out, the first show-cause notice was not required to be issued by extending period of limitation, accordingly, the same is not sustainable. 4. On the other hand, the ld.A.R. for the Revenue supported the impugned order and submitted that it is an admitted fact that the appellant was availing cenvat credit on common input services for providing exempted as well as taxable services. Therefore, the impugned order is to be confirmed. 5. Heard both the parties and considered the submissions. 6. In that case, the issue is whether the appellant is liable to pay the amount equal to 5%/6% of the value of exempted services for maintenance of separate account for common input services. 7. We find that although the appellant is maintaining separate account for exempted as well as taxable services and reversed the proportionate cenvat credit attributable to the exempted services. For transaction charge services, the service tax paid by the appellant was not proportionately reversed by the appellant. But on pointing out by CERA audit, the appellant has reversed the same. The same has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cenvat Credit Rules is not enacted to extract illegal amount from the assessee. [emphasis supplied] 8. The CESTAT, Hyderabad in the case of Aster Pvt. Ltd. Vs. CCEHyd-III, 2016 (43) STR 411 (Tri.-Hyd.) has held as under:- 5. xxxxxxxx The above Rule 6(3A) states that while exercising the option, the manufacturer of goods or the provider of output service shall intimate in writing the department regarding the option exercised. In the present case, admittedly there is no intimation given by the appellant informing his exercise of option. The contention of the department is that when the appellant has not intimated his option in writing then the appellant is bound to pay the duty amount calculated under the first option. I am afraid I cannot endorse this contention. The said rule does not say that on failure to intimate, the manufacturer/service provider would lose his choice to avail second option of reversing the proportionate credit. Rule 6(3A), as seen expressly stated is nothing but a procedure contemplated for application of Rule 6(3). Therefore, the argument of the Revenue that the requirement to intimate the department about the option exercised, is mandatory and that on failur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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