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of <h1>Appeal granted, demand notice set aside due to limitation bar, citing precedent.</h1> <h3>M/s Netmagic Solutions Pvt. Ltd. Versus Commissioner of GST & CX, Mumbai-III</h3> The Tribunal allowed the appeal, setting aside the demand notice for recovery of amount with interest and penalty. The appellant's argument that the ... CENVAT Credit - trading of service (exempted service) - Rule 6(3) of the CENVAT Credit Rules, 2004 - period from April, 2008 to March, 2009 and April, 2010 to March, 2011 - Time Limitation - HELD THAT:- It is not in dispute that the appellants are providing taxable services as well as engaged in trading activity during the relevant period. Also, it is not in dispute that common input services were used in providing taxable services and the trading activity. The appellants have been meticulously reversing the proportionate credit attributable to the trading activity. However, the Department has demanded 6%/8% of the value of the trading activity considering the same as an exempted service. This Tribunal in similar facts and circumstances in TRENT HYPERMARKET LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-III [2019 (6) TMI 1327 - CESTAT MUMBAI] observed that invoking extended period of limitation in such circumstances is unwarranted. Appeal allowed - decided in favor of appellant. Issues:- Whether the demand is barred by limitation.Analysis:- The appeal was filed against an Order-in-Appeal passed by the Commissioner of GST & Central Excise. The appellant was engaged in providing taxable services and trading of services. The appellant availed CENVAT Credit on input services used for taxable services but failed to discharge 6%/8% of the value of the trading service as required by Rule 6(3) of the CENVAT Credit Rules, 2004. A demand notice was issued proposing recovery of the amount with interest and penalty. The demand was confirmed on adjudication, and an appeal was filed.- The appellant argued that they had reversed the proportionate CENVAT Credit attributable to exempted services during the relevant period and had reflected this in their ST-3 returns filed with the Department. The appellant contended that the demand was barred by limitation since all relevant facts were known to the Department. The appellant also challenged the imposition of penalty and interest, citing a Tribunal judgment in a similar case.- The Revenue supported the findings of the Commissioner (Appeals). After hearing both parties and examining the records, the Tribunal considered the limited issue of whether the demand was barred by limitation. It was noted that the appellant had diligently reversed the credit attributable to trading activity in their returns. Citing a previous Tribunal judgment, it was observed that invoking the extended period of limitation in such circumstances was unwarranted.- The Tribunal found merit in the appellant's argument and set aside the impugned order, allowing the appeal with consequential relief as per the law. The Tribunal's decision was based on the principle established in the previous case, where it was held that demands confirmed under similar circumstances cannot be sustained on the ground of limitation.
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