Tribunal rules in favor of appellant, finding Rule 6(3) inapplicable.

The Tribunal ruled in favor of the appellant, holding that Rule 6(3) of the Cenvat Credit Rules, 2004 did not apply to the appellant's situation for the relevant periods. The judgment emphasized the non-applicability of the rule to trading activities and the correct availing of Cenvat credit by the appellant for taxable services. Consequently, the impugned duty demand was set aside, and the appeal was allowed with any consequential relief.

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Issues:
- Appeal against duty demand for Cenvat credit on input/services for manufacturing and trading activities under Rule 6(3) of Cenvat Credit Rules, 2004 for 2008-2009 to 2011-2012.

Analysis:
1. Issue of Trading Activity Classification:
The appellant argued that trading activity was not considered exempted services before 1-4-2011. They contended that Rule 6(3) should not apply for the period before this date. It was highlighted that post 1-4-2011, the appellant only availed Cenvat credit for taxable services, not for trading activity. The Revenue disputed this, citing Rule 6(3)(ii) applicability. However, the Tribunal referred to a previous case where it was held that trading activity, being covered under sales tax law, cannot be termed as services. Consequently, the Tribunal ruled that Rule 6(3) did not apply to the appellant for the period before 1-4-2011 and that post this date, the appellant had correctly availed Cenvat credit only for taxable services, not for trading activity.

2. Judgment and Relief:
After hearing both parties and considering submissions, the Tribunal found that Rule 6(3) did not apply to the appellant's case. Therefore, the impugned order demanding duty was deemed unsustainable in the eyes of the law and was set aside. The appeal was allowed with any consequential relief. The judgment was dictated and pronounced in open court by the Member (J).

In summary, the Tribunal ruled in favor of the appellant, holding that Rule 6(3) of the Cenvat Credit Rules, 2004 did not apply to the appellant's situation for the relevant periods. The judgment emphasized the non-applicability of the rule to trading activities and the correct availing of Cenvat credit by the appellant for taxable services.

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