Tribunal allows partial input credit denial, emphasizes accurate calculations, precedent adherence.

The Tribunal allowed proportionate denial of input service credit, disallowing only &8377; 17,718 related to trading services, setting aside the penalty due to the appellant's genuine belief pre-2011, and stressing the importance of accurate calculations in such matters. The appeal was disposed of in favor of the appellant, emphasizing adherence to precedent and the details of audit objections and show cause notices.

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Issues:
Appeal against denial of input service credit for trading and output services.

Analysis:
1. The appellant, engaged in output services and trading, faced denial of input service credit by audit objections. A show cause notice was issued to deny credit of &8377; 4,10,320 for common services used in both trading and output services.

2. The appellant argued that prior to 1.4.2011, trading was not exempted, so they believed they could claim full credit. They cited a Tribunal case for proportionate denial of credit, suggesting only &8377; 17,718 should be disallowed. They sought setting aside the demand and no penalty imposition.

3. The respondent contended that although proportionate credit was allowed in a previous Tribunal case, both lower authorities upheld the full denial of &8377; 4,10,320. Any miscalculations were suggested to be referred back for corrections.

4. The Tribunal found no dispute on merits, relying on the precedent. It determined that only &8377; 17,718 of credit related to trading should be disallowed, considering audit objections and show cause notice details. The appellant's genuine belief pre-2011 led to the penalty being set aside.

5. Consequently, the Tribunal disposed of the appeal by allowing proportionate denial of credit, setting aside the penalty due to the appellant's genuine belief, and emphasizing the need for accurate calculations in such cases.

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