ECIL RAPICSCAN LTD. Vs. COMMR. OF SERVICE TAX

JUDGEMENT

(1.) IN terms of the impugned order, the appellants are required to pre -deposit the following amounts.

(2.) WE have heard both the sides. The appellants supplied XBIS systems to various establishments in the country. They also supplied to Jammu and Kashmir clients. In terms of their contract with the various clients, they sold the items and also undertake AMC contracts. Service tax is payable under the category of AMC service. Department proceeded against them for payment of service tax on two grounds. The first one relates to the supply of service to J&K region. It is the contention of the Department that Rule 6(3)(c) of Cenvat Credit Rules would be involved when there is rendering of output service to taxable and exempted category. It is the assumption of the Revenue that the service rendered to J&K region would fall under exempt category. The ld. Chartered Accountant took pain to show that J&K region itself is outside the purview of the Act governing the service tax. This has been clearly stated in the findings by the Original authority in Para 18 of his order -in -original. When this is the case the appellant would not come under the purview of Cenvat Credit Rule 6(3)(c) and there would not be any requirement for them to maintain separate account. Consequently the restriction of 20% credit will not be applicable.