Tribunal remands case for credit reversal quantification, lifts penalties. Appellant liable for interest.

The Tribunal set aside the impugned order and remanded the case for quantification of the credit reversal amount, lifting penalties. The appellant is liable for interest, and the appeal was allowed for remand due to interpretational issues regarding the eligibility of credit for common input services used for both taxable services and trading without separate accounts maintenance.

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Issues:
- Eligibility of credit availed for common input services used for both taxable services and trading without separate accounts maintenance.

Analysis:
The appellants, engaged in providing taxable services and trading, availed common input services without maintaining separate accounts. The department contended that credit for trading is not eligible, proposing to disallow credit proportionate to the turnover of traded goods. The original authority confirmed the demand, interest, and penalties. The appellant argued they reversed the credit as per Rule 6(3A) and that the demand on traded goods turnover is unjust as VAT was already paid. They cited precedents like M/s. TFL Quinn India Pvt. Ltd. and Mercedes Benz India Pvt. Ltd. The AR supported the impugned order. The Tribunal analyzed the issue, noting that post-1.4.2011, trading was deemed exempted, with a clear formula for credit reversal. Pre-1.4.2011, confusion existed on trading's status. Referring to Ruchika Global Interlinks and TFL Quinn India cases, the Tribunal found the post-2011 formula applicable pre-2011. The appellant must reverse credit per Rule 6(3D)(c) for trading, requiring quantification by the adjudicating authority. Due to interpretational issues, no penalty was imposed.

The impugned order was set aside, remanding for quantification of credit reversal amount, with penalties lifted. The appellant is liable for interest, and the appeal was allowed for remand.

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