The Assistant Commissioner of Service Tax, 24th April, 2006

Division - I, 39 Rabindra Sarani,

Mody Building, 3rd Floor,
Kolkata – 700 073.

Sir,

Please refer to your show cause notice no. C.NO.V(12) 115/RAC/SCN/R-1/D-

I/Kol/06/267 dated 04/04/2006 wherein you have sought to recover 2,040/- as Service
Tax and Education Cess for wrongly utilizing cenvat credit on the Company Secretary
Service and also sought to recover interest and impose penalty upon us.
In this regard we would like submit as follows:-
1) It has been alleged in the show cause notice that service of company secretary
appears to be not used directly in providing services as Chartered Accountant.
However nothing has been stated in the show cause notice regarding the basis of
allegation that we have not directly utilised the services of Company Secretary in
the course of provision of our service. Your allegation is based merely on
conjectures and surmises and as such without any material or evidence in your
record. We would like to bring to your kind attention the fact that in the course of
rendering of our professional services as a Chartered Accountant, we are required
to avail the services of other professionals like Company Secretaries, Advocates
etc., which are directly used for the provision of our service.
2) It has been further stated in your show cause notice, while analyzing the Cenvat
Credit Rules, 2004, that if any service is used indirectly in relation to providing
output service, it would not qualify to be an “input service”. However, even
though as stated above we are directly utilizing the services of Company Services
in providing our services, we would like to point out that as per Rule 2(l) of the
Cenvat Credit Rules, 2004, “input service” means any service used by a service
provider for providing an output service. The connotation used while defining
“input service” is “any service”, hence it should be deemed to be inclusive of both
direct and indirect services. In the interpretation of statute, an interpretation which
unduly restricts the scope of a beneficial provision should be avoided. This
principle was upheld by the Honorable Apex Court in the case of Union Of India
Versus Suksha International & Nutan Gems & Anr. - 1989 (39) E.L.T. 503 (S.C.)

Hence we would request you to kindly drop any further proceedings against us.
We further request you to kindly give us an opportunity to be heard in person before
making any adverse adjudication against us.
Thanking You,
Yours Faithfully,

For Rajneesh Agarwal & co.

Proprietor