1. The appellants are engaged in the business of providing services in relation to transport of goods and passengers by airport services etc. They have been rendering both taxable as well as exempted services during the period of dispute from September 2004 to March 2005. Assessees were not maintaining separate accounts in respect of CENVAT credit where both taxable and non-taxable services are provided. They were required to utilize credit only to the extent of 20% of the credit earned of service tax payable on taxable output service. That appellants did not utilize the CENVAT credit for payment of service tax on the taxable output services from September 2004 to March 2005. However, they utilized that credit earned during the earlier period for discharge of tax liability for April and May 2005. Department took the view that such subsequent utilization of the amount, utilizing credit in excess of 20% for the month of April and May 2005 is erroneous. In proceedings initiated against the appellant, the adjudication authority vide the impugned order confirmed recovery of the alleged excess utilization of credit amounting to Rs. 58,06,851/- along with interest liability thereof. Aggrieved the appellants are before this forum.
2. Today, when the matter came up for hearing, Ld. counsel Shri P. Ravindran submits that it is not the case that they had utilized more than 20% of the credit eligible to them for the period September 2004 to March 2005. However, during such period, the tax liability on the taxable output services were discharged by them through cash and the eligible 20% credit amount was not utilized that period. Such quantum of earned credit not utilized earlier was subsequently utilized by them for discharge of tax liability for the months of April and May 2005. Ld. counsel places reliance on the ratio of the following case laws:-
(a) Vijayanand Roadlines Ltd. Vs. Commissioner of Central Excise, Belgaum : 2007 (7) STR 219
(b) Idea Cellular Ltd. Vs. Commissioner of Central Excise, Rohtak : 2009 (16) STR 712
(c) M/s. C.L. Educate Vs. Commissioner of Service Tax, Delhi 2015 (10) TMI 2544
He also submits a chart giving the details of the eligible CENVAT credit earned for the period September 2004 to March 2005 and also to show the quantum that was utilized subsequently for discharge of tax liability in April and May 2005.
3. Heard both sides.
4. From the impugned order, it is seen that the adjudicating authority in para 14.1 has held that the assessee is entitled to utilize the CENVAT credit to the extent of 20% and that it has not disputed that they had utilized credit more than the permissible limit. The adjudicating authority has also observed that the credits that were not utilized as on 31.3.2005 will not lapse and the assessee can utilize the CENVAT credit towards future payment of service tax. We are unable to fathom having reached such a conclusion the adjudicating authority then takes a U turn holds that such utilization is on the restrictions imposed under Rule 6(3) of the CENVAT Credit Rules as was in force during the material time. However, a perusal of Rule 6(3)(c) indicates that there is no such restriction that 20% credit earned should be utilized within a particular period. This being so, we do not find any sustenance in the decision of the adjudicating authority. We also find that the case laws cited by the ld. counsel fully covers the dispute in favour of the appellant. In the circumstances, we are of the considered opinion that the impugned order cannot sustain and will have to be set aside which we hereby do. In the result, the appeal is allowed with consequential relief, if any, as per law.
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/>5. Revenue has filed the above miscellaneous application for change of cause title from Commissioner of Service Tax, Chennai to The Commissioner of GST & Central Excise, Chennai South Commissionerate consequent upon the introduction of GST and the resultant change in the jurisdiction. We allow the miscellaneous application for change of cause title and direct the Registry to amend the cause title accordingly.