Order Date – 01 February 2024

Parties: Alstom T & D India Ltd Vs Commissioner of GST & Central Excise

Facts –

• The Appellant, Alstom T & D India Ltd, has availed CENVAT credit on common input services which were used for providing both taxable as well as exempted services, they have to pay an amount equal to 6% of the value of the exempted services as per the provisions of Rule 6(3)(1) of the CENVAT Credit Rules, 2004.
• As the appellant has not paid the 6% of the value of the exempted services of works contract services rendered by them to Chennai Airport, Show Cause Notice was issued and after due process, the demands were confirmed in the OO.

Issue –

• Whether the appellant is required to pay an amount equal to 6% of the value of the exempted services?

Order –

• The Tribunal observed that from the definition of ‘exempted services’ as defined under Rule 2(e) of CENVAT Credit Rules, 2004, it is very clear that exempted services would also include services on which no service tax is leviable under the Act. Since no service tax is leviable on the works contract service rendered by the appellant to Chennai Airport project, these services have been rightly considered as exempted services by the authorities below.
• Thus, the demand has been rightly confirmed in the impugned order. Accordingly, the Tribunal upheld the demand equal to 6% of the value of the exempted services confirmed in the impugned order along with interest.
• Since there is no evidence brought on record to establish suppression of facts with an intention to evade payment of the tax. Accordingly, it was found that this is a fit case for invocation of provisions of section 80 of the Finance Act, 1994 to waive the penalty imposed. Appeals is disposed of accordingly.