Case Law Details
Mould Equipment Limited Vs Commissioner of CGST & CX, Howrah Commissionerate (CESTAT Kolkata)
ST – Where Cenvat credit wrongly taken is subsequently reversed, it is tantamount to non-availment of credit – Rule 6(3) of Cenvat Credit Rules (CCR)is inapplicable in such circumstances: CESTAT Kolkata
In the present case, it is an admitted fact that the appellant did not maintain separate accounts for the input services used in or in relation to the provision of taxable service as well as exempt service. Therefore, two options were available to them, i.e., either to pay 6% of value of the exempted service or pay an amount equal to the credit attributable to the input services used in or in relation to exempt services subject to the provisions of Sub-rule (3A). When the mistake was pointed, the appellant reversed the proportionate common credit taken on input services used in the provision of exempt services. Therefore, Rule 6(3) (i) will not have any application, when a credit is taken wrongly and the same is reversed as it tantamount to non-availment of the credit.
FULL TEXT OF THE CESTAT JUDGEMENT
The appellant assessee is in appeal against the Order-in-Appeal dated 31/10/2017 wherein demand of CENVAT credit reversal amounting to Rs.32,40,001/- under Rule 6(3) of the Cenvat Credit Rules, 2004 on account of provision of exempted services and provision of taxable service was confirmed by the Commissioner(Appeals) for the period from 2010-11 to 2013-2014.
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