Page 154 - GSTL_2nd July 2020 _Vol 38_Part 1

72 GST LAW TIMES [ Vol. 38
that Cenvat credit had been wrongly availed and therefore, the same is liable for
recovery under Rule 14 of CCR, 2004 read with Section 73 of the Finance Act,
1994. A demand has been raised to recover the Cenvat credit wrongly availed
along with interest under Section 75 of the Finance Act, 1994. Further, penalty
was proposed to be imposed upon them under Section 78 of the Finance Act,
1994. The show cause notice also alleged that the appellant had availed Cenvat
credit on the basis of debit notes which are not eligible documents for availing
Cenvat credit under Rule 9 of CCR, 2004. The appellant contested the demand.
After following due process, the original authority, vide O-I-O No. 15/2017, dat-
ed 29-11-2017, confirmed the demands and imposed penalties as proposed. Ag-
grieved, the appellant appealed before the first appellate authority who rejected
their appeal and upheld the order of the lower authority. Hence this appeal.
3. Learned Counsel for the appellant submits that they not only manu-
facture cement but also render various services and hence have been registered
with the department both under Central Excise and also under the provisions of
Service Tax. The entire period is post-2012 and therefore, all services which are
not covered by the negative list were taxable during the relevant period. It is not
in dispute that they are registered with the Service Tax department and the de-
mand has also been raised invoking the provisions of the Finance Act, 1994.
There are basically two allegations against them;
(1) That they have availed Cenvat credit on the input services which
are meant for personal use of their employees and hence excluded
by clause (C) of Rule 2(l) of CCR, 2004 from the definition of input
service.
(2) That they have availed Cenvat credit on the basis of debit notes
which are not eligible documents for availing Cenvat credit under
Rule 9 of CCR, 2004.
4. As far as the first allegation is concerned, he would submit that it is
true that they have taken Cenvat credit on the alleged services which have been
provided by them to their employees in their residential quarters. However, they
have also recovered amounts for these services from their employees along with
appropriate Service Tax and paid such Service Tax to the Government account.
They have further reflected these amounts in their ST-3 returns filed with the
department. In this factual matrix, the employees, as far as the disputed services
are concerned, are their service recipients. It is true that they are otherwise their
own employees but as far as these services are concerned, they are service recipi-
ents. They have collected amounts for the services provided by them such as in-
ternet services, d2h services, etc., and paid appropriate Service Tax on the same.
In order to render these services to their employees they had to use the input
services of the internet service provider, Tata sky d2h service provider etc. There-
fore, they are not covered by the exclusion under clause (C) of Rule 2(l) of CCR,
2004.
5. As far as the second allegation is concerned, he would submit this is
factually incorrect. They have availed Cenvat credit on the basis of the tax paid
invoices issued by their input service providers. They have used the mechanism
of debit notes to recover amounts from their employees. They have raised debit
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