2014 (1) TMI 1332

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....e out of confirmed duty demand of Rs.1.27 Crores, equivalent penalty and interest. 2. The basic question that arises for our consideration in this appeal as formulated by the appellant is :-      "Whether in the facts and circumstances of the case, the Appellate Tribunal was justified in directing the Appellant to pre-deposit Rs.1,00,00,000/- under section 35F of the Act?" 3. The brief facts relating to this appeal are that :-      (a) The appellant is engaged in the manufacture of excisable goods as well as in trading of goods manufactured by other independent manufacturers. The traded goods were received by the appellant after having been cleared by the manufacturer thereof on payment of....

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....nt of pre-depositing the duty, penalty and interest as confirmed by the order dated 26 December 2012 of the Commissioner of Central Excise for the purposes of its appeal being heard on merits.      (f) On 16 July 2013 the Tribunal disposed of the appellant's stay application by holding that Cenvat credit on input service during the period relevant to the proceeding was available only if the input services were used either in the manufacture of final product or in providing output services in terms of rule 2 (l) of the Cenvat Credit Rules 2004. In this case it was held that prima facie the input services have been used in the appellant's trading activity and not in manufacturing activity or providing output services. H....

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.... its activity of trading. Therefore, it was in the above context that the Tribunal had granted a stay of further deposit. The decision in Ericsson India Pvt. Ltd. (supra) has followed the Tribunal's decision of BHEL-GE Turbine Service (P.) Ltd. (supra) and granted a stay of service tax on input services used for trading activities even though there was no reversal of credit as in the case of BHEL-GE Turbine Service (P.) Ltd. (supra). However, we find that both the aforesaid decisions dealt with the issue of restricting the use of input services credit to the extent of 20% in terms of rule 6(3) of the Cenvat Credit Rules, 2004 and the issue whether the input services received by the appellant for use in traded goods satisfies the definition ....