Tribunal allows cenvat credit for trading activity pre-2011, rejects Revenue's claim. No penalty imposed.

The Tribunal allowed the appeal, holding that the appellant could avail cenvat credit for trading activity and common input services before 1.4.2011. It found no nexus between trading and manufacturing activities, rejecting the Revenue's claim. The demand for 6% of traded goods' value was set aside. The Tribunal also ruled that the extended limitation period was not invocable due to lack of evidence, leading to a remand for proper quantification within the limitation period. Consequently, no penalty was imposed on the appellant, and the appeal was disposed of in their favor.

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Issues:
1. Denial of cenvat credit attributable to trading activity and demand of 6% of the value of trading activity.
2. Entitlement to avail cenvat credit on common input services for the period before 1.4.2011.
3. Invocability of the extended period of limitation.

Analysis:
1. The appellant appealed against an order denying cenvat credit related to trading activity and demanding 6% of the trading value. The appellant availed credit on common services for both manufacturing and trading activities. The issue was whether the appellant could avail credit for trading activity. The appellant argued against the denial on three grounds. The Revenue supported the impugned order. The Tribunal found no nexus between trading and manufacturing activities, resolving this issue.

2. The next issue was whether the appellant could avail cenvat credit on common input services before 1.4.2011 while engaging in trading and manufacturing. The Tribunal referred to Notification No. 03/2011-CE (NT) and a previous case to determine that trading was not an exempted service before 1.4.2011. Thus, the appellant was not required to reverse cenvat credit or pay 6% of traded goods' value for this period, setting aside the demand.

3. The final issue was the invocability of the extended period of limitation. The Revenue claimed suppression of facts, but the Tribunal found no positive evidence supporting this. Citing a previous case, the Tribunal held that the extended period was not invokable. The calculation of demand was found incorrect, leading to a remand for proper quantification within the limitation period. As the extended limitation period was not applicable, no penalty was imposed on the appellant, and the appeal was disposed of accordingly.

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