Service Tax
TRT-2025-
Cestat Kolkata
Date:-10-08-22
In:-
Issue Favourable to Tax Payer ?:- 0
Order Date – 10 August 2022
Facts –
- The Appellant, M/s Popular Vehicles and Services Pvt. Ltd., is engaged in providing service of Authorized Service Station and trading of spares and accessories of Maruti brand cars.
- During verification of accounts, it was noticed that the appellant is availing cenvat credit of service tax paid on various services including common input services for both taxable services as well as trading of goods. However, trading of goods is an exempted service w.e.f. 01.04.2011.
- As per Rule 6 (3) of Cenvat Credit Rules, 2004, the appellant is required to pay an amount equal to 6% of value exempted services or pay an amount under Rule 6(3A) for the period from April 2011 onwards which they failed to do.
- Show cause notice dated 04.04.2013 was issued for the period October 2010 to March 2011 and the original authority disallowed the credit of Rs.7,31,362/- being the wrongly availed credit for the period October 2009 to September 2010 along with interest and imposed penalty.
- Aggrieved the appellant filed an appeal.
Issue –
- Whether the Cenvat Credit availed by the appellant shall be disallowed?
Order –
- The Tribunal observed that the appellant has reversed credit of Rs.14,41,435/- which is reflected in their ST returns for the period October 2010 to March 2011. Though the closing balance in the returns show as Rs.14,41,435/-, the balance noted in the ST-3 returns for the period April 2011 to September 2011 shows the opening balance as Nil. This would show that the appellant has not carried forward the cenvat credit which is sufficient evidence to show that the appellant has reversed the sum for the disputed period.
- Therefore the returns filed by the appellants establish that they have not carried forward the credit from the previous period. As the appellants have reversed the credit their liability under Rule 6 (3) of CCR 2004 stands extinguished. The impugned order therefore cannot sustain and requires to be set aside.
- The appeal is allowed.
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