TaxTMI 
TaxTMI 
2008 (2) TMI 784
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....iz. electric kitchen chimneys and parts thereof falling under chapter heading no. 8414 of Central Excise Tariff Act, 1985, and also having office of trading activity of similar goods along with their domestic appliances; that the appellant is availing benefit under Cenvat Credit Rules, 2002/2004 for credit on input as well as input services used in relation to manufacture of finished goods; that the appellants maintain a common Balance Sheet for its manufacturing and trading activities; that during the course of audit in August, 2005 it was noticed that in 2004-05 and 2005-06 the appellant used the services such as advertising, public relation activity, retainer fee charges, marketing consultancy, courier and management services etc. for th....
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.... per un-audited balance sheet/trial balance for 2005-06 the ratio was 71:29 and accordingly the total credit available to the manufacturing units was thus worked out to Rs. 46,76,348/- and the remaining part of the input Service Tax credit availed to the tune of Rs. 23,48,849/- was required to be reversed by the appellant as they were not entitled to this credit; that basing on the above proposition Show Cause Notice was issued to recover the inadmissible credit of Rs. 23,48,849/- under provisions of Section 11A of Central Excise Act, 1944 read with Rule 14 of Cenvat Credit Rules, 2004 for contravention of provisions of Rule 3 read with Rule 2(1) of Cenvat Credit Rules read with Rule 9(6) and 9(7) of the Rules inasmuch as they did not maint....
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....lation to business' and therefore the credit of tax on services which are commonly used for manufacturing as well as trading activities is rightly availed by the appellant; (iii) that the adjudicating authority has grossly erred in relying on Rule 6 of Cenvat Rules inasmuch as Rule 6 is not invoked in the show cause notice and therefore the finding of the adjudicating authority are beyond the scope and ambit of the Show Cause Notice; (iv) that the adjudicating authority erred in relying on Rule 6 as it is applicable only in the circumstances where appellant is manufacturing exempted and dutiable goods, whereas the appellant is neither manufacturing any exempted goods nor there is any allegation to that effect i....
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....of the goods marketed by his client vide his letter dated 22-2-2008. 4. I have gone through the case records including the record of personal hearing and further submissions made on 22-2-2008. Though the hearing was held for hearing stay petition, I feel I can take the main petition itself for decision. The main points involved in the appeal are that whether the appellant is right in taking Cenvat credit of various input services which includes advertisement and utilizing the same on payment of final product manufactured by them. The appellant has simultaneously imported similar items and is engaged in trading activity also. For re­selling their own manufactured items as well as their imported items they incur certain expenditur....
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....partment wants to disallow a part of the credit worked out on the basis of ratio between manufacturing and trading activities since the goods involved in trading activities are exempted goods. Rule 6(2) deals with dutiable and exempted manufactured goods whereas the activities undertaken by the appellant is trading activity of similar goods which were imported. Therefore, the same cannot be equated with exempted goods envisaged under Rule 6(2) of Cenvat Credit Rules. The words used in Rule 6 are "the Cenvat Credit shall not be allowed on such quantity of input or input services which is used in the manufacture of exempted goods or exempted services". Therefore, the situation should be that the manufacturer shall not be allowed to take input....
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.... Notice was issued after a period of one year. The following judgments also support the contention of the appellant : (i) Vijayanand Roadlines Ltd. v. CCE, Belgaum [2007 (8) S.T.R. 600 (Tri-Bang)] (ii) Hyundai Motors (I) Ltd. v. Commissioner of Service Tax, Chennai [2007 (5) S.T.R. 221 (Tri-Chennai)] (iii) Bridgestone Financial Services v. Commissioner of Service Tax, Bangalore [2007 (8) S.T.R. 505 (Tri.-Bang.)] (iv) Hassan Hajee & Co. v. CCE, Mangalore [2007 (5) S.T.R. 397 (Tri-Bangalore)] (v) BPL Ltd. v. Commissioner of Service Tax, Bangalore [2006 (4) S.T.R. 307 (Tri.-Bang.)] On this ground also the impugned order is not sust....