P. K. CHOUDHARY:

The present appeal has been filed by the Appellant-Company assailing the Order-In-Original No.13-ST-PC-CGST- NOIDA-2023-24, dated 27.12.2023 passed by Commissioner(Appeals) CGST & Central Excise, Noida.

2. Briefly stated, the facts of the case are that the Appellant is a public sector undertaking and is engaged inter alia in providing ‘Works Contract Services’, ‘Repair and Commissioning Services’ and other taxable services. The Appellant was registered with the Service Tax Department and has duly filed its Service Tax Returns for the relevant period.

3. The Appellant, being a provider of output service, avails CENVAT credit in accordance with provisions of the Credit Rules. The Appellant, during the relevant period, has opted for reversal of proportionate CENVAT credit in terms of Rule 6(3A) of the Credit Rules and has accordingly filed intimations with the Department. For computing the reversal of CENVAT credit, the Appellant took into consideration only amount of Common CENVAT credit instead of amount of Total CENVAT credit. Further, the Appellant was also engaged in the trading activity which was treated as exempted service. The total CENVAT credit included the amount of CENVAT credit in respect of inputs/input services, which were exclusively used in providing taxable output service/ supply of dutiable goods, and such amount CENVAT Credit was not included into the amount of Common CENVAT Credit. The Appellant considered that common CENVAT credit, which pertained to inputs and input services which were commonly used in providing taxable as well as exempted services/goods, forcomputing the proportionate amount of reversal of credit.

4. The reversal of the amount of CENVAT Credit under Rule 6(3) was regularly disclosed in the ST-3 Returns. At various times, audits and enquiries were made by the different departmental officers at the premises of the Appellant. The last investigationwas made by DGGI Gurugram zonal unit.

5. Such last investigation culminated into issuance of the impugned Show Cause Notice, SCN dated 17.09.2020 proposing the demand and recovery of Service tax amounting to Rs. 10,99,10,976/- under Section 73 of the Finance Act, read with Rule 14 of the CENVAT Credit Rules ("CCR"), by invoking the extended period of limitation, along with interest thereon under Section 75 ibid, read with Rule 14 of the CCR, and penalty under Section 78 ibid, read with Rule 15(3) CCR, in respect ofalleged short-payment of amount under Rule 6(3A) of CCR.

6. The SCN alleged that trading is covered under the exempted services. The main allegation in the SCN is that in terms of Rule 6(3A)(c)(iii), for the purpose of computing the amount of CENVAT credit to be reversed, the Total CENVAT credit is required to be taken into consideration instead of the common CENVAT credit. It was alleged that as the Appellant took into consideration only common CENVAT credit for computing the proportion of CENVAT credit for reversal in respect of exempted service/goods, therefore, the reversed amount of CENVAT credit was less and accordingly, alleged excess CENVAT credit availed (or short CENVAT Credit reversed) has beencomputed in the SCN.

7. It was alleged that prior to amendment made in the rule 6(3)(a) with effect from 01.04.2016, the requirement was to take into consideration the total CENVAT credit and only from 01.04.2026, common CENVAT credit is to be taken into consideration for the purpose of computation. The Appellant filed a detailed reply on 24.09.2020 rebutting all the allegationscontained in the SCN.

8. The Adjudicating Authority confirmed the demand adopting the same reasoning as alleged in the SCN. The following computation was made in the SCN as well as in the impugnedorder.

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9. Further, the demand has been confirmed for the extendedperiod of limitation mainly on the ground that the Appellant suppressed the material facts as the correct amount of reversal was not disclosed and only invest