Service Tax
TRT-2025-
Cestat Allahabad
Date:-04-07-22
In:-
Issue Favourable to Tax Payer ?:- 0
Order Date: 04 July 2022
Facts:
- The appellant, M/s Global Logic India Limited, had availed and utilized the CENVAT credit of Service tax paid on input services received in its SEZ Unit.
- The Department, amongst other allegations, disallowed the utilization of CENVAT Credit on the ground that the appellant should have claimed exemption by a refund for the period prior to 01.07.2013.
- Aggrieved, the appellant filed for an appeal.
Issue:
- Whether the appellant is allowed to take CENVAT Credit of Service tax paid on input services received by the SEZ unit?
Order:
- The authorities observed that the Exemption Notifications dated 01.03.2011 and 30.06.2012, granted only conditional exemption from payment of service tax. The appellant could, therefore, forego such exemption and claim benefit of CENVAT credit on the same amount of Service tax paid on input services as would have been available as refund to an SEZ Unit
- Relying on the case of Supreme Court in Belarpur Sugar & Allied Indus. Ltd. vs. Collr. Of C.Ex., Aurangabad, the Tribunal held that disallowing CENVAT Credit taken of Service tax paid on input services received by the SEZ unit on the ground that the SEZ Unit could only have opted for exemption by way of refund of such service tax cannot be sustained.
- In respect to demand of Service tax on rent-a-cab service under reverse charge, it was held that as per Section 73(4A) and the Explanation to Section 73 of the Finance Act no penalty shall be imposed if the assessee has paid the amount of service tax along with interest before the service of the show cause notice, whether on the basis of his own ascertainment or on the basis of ascertainment by the Department. Thus, the demand in the instant case is set aside.
- Further, the appellant had not made the payment in respect of this invoice dated 31.03.2014 and rightly reversed the CENVAT credit taken by voucher dated 01.07.2014. This reversal was done three months from the date of the invoice. Thus, the demand of interest and penalty on the CENVAT Credit taken and later reversed by the appellant in accordance with the provisions of rule 4 (7) of the Credit Rules could not have been confirmed.
- Hence, the appeal was allowed and order was set aside.
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