Commissioner of Central GST And Central Excise Vs Reliance Industries Limited (CESTAT Ahmedabad)
The appeal was filed by the Commissioner of Central GST and Central Excise, Rajkot, challenging an order-in-original dated 03.10.2018 by which the adjudicating authority had dropped the proposal in a show cause notice dated 28.10.2008 for recovery of Cenvat credit amounting to ₹8,24,58,703 along with interest and penalty. In the present appeal, the Revenue restricted its challenge to a portion of the demand amounting to ₹1,15,30,018.
The dispute concerned the admissibility of Cenvat credit on service tax paid on insurance services received by the respondent prior to 01.07.2003, when Business Auxiliary Service became taxable. The Revenue contended that before 01.07.2003, the respondent was not providing any taxable output service and, therefore, insurance services received prior to that date could not qualify as “input services” under the Service Tax Credit Rules, 2002. It was further argued that there was no provision permitting pro rata availment of credit under the Service Tax Credit Rules, 2002, the Service Tax Rules, 1994, or the Cenvat Credit Rules, 2004. The show cause notice also alleged that credit was inadmissible under Rule 3(3) of the Service Tax Credit Rules, 1994, as the services were received in relation to an output service that was exempt at the relevant time.
