Service Tax
TRT-2025-
Cestat Ahmedabad
Date:-01-03-23
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 01 March 2023
Parties: Black Box Limited Vs C.C.E. & S.T.-AHMEDABAD-III
Facts –
- The Appellant, Black Box Limited, was found to be providing exempted as well as taxable services to their clients situated at Jammu & Kashmir and services provided to the units of situated in Special Economic Zones. It was found that Appellant had not maintained separate account for the same.
- It was noticed that appellant had utilized cenvat credit of more than admissible amount i.e. 20% /35% of the amount of Service tax payable on taxable output services. Accordingly, show cause notice was issued to the Appellant for short payment of Service tax.
Issue –
- Whether the appellant is liable to pay the excess cenvat credit utilized?
Order –
- The Tribunal observed that the excess utilized credit cannot be demanded, as Rule6(3)(c) is silent with regard to the period during which the 20% credit shall be utilized. Therefore, in the present matter the demand of service tax on this ground does not sustain. As several years have passed, the appellant would have been entitled to utilize the credit subsequent to the period in question and therefore the demand on this ground is not sustainable.
- Since the service provided to the state of J&K are not liable to service tax, as Section 64 of Chapter V of Finance Act, 1994 excludes the applicability of service tax to the state of Jammu and Kashmir, these services are neither taxable nor exempted. The services provided to non-taxable territory cannot be considered as exempted service. Hence the provisions of Rule 6 of Cenvat Credit Rules is not applicable and no service tax demand is sustainable in this matter.
- On perusal of the retrospective amendment as has been brought in by Finance Act, 2012 by Section 144, during the impugned period, there was no need for the assessee to reverse any credit taken on the inputs/input services in respect of which credit was availed for rendering of output services to SEZ units/SEZ developer.
- Hence the appeal is allowed.
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