2015 (11) TMI 1045

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....iness Auxiliary Service'. The appellant avails Cenvat credit of service tax paid on various taxable services viz. Telephone, Advertising, Insurance, Banking & other Financial services, Maintenance & Repair, Courier, Security service etc. for utilization towards payment of service tax on the aforementioned output services. 1.2 During the disputed period, taking of Cenvat credit by the appellant on the abovementioned input services was disputed by the Central Excise department on the ground that said services have been commonly used for providing the taxable output service as well as for trading activity, an exempted service. Show cause proceedings initiated for reversal of Cenvat credit attributable to the trading activity, culminated in th....

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....ins the same (before and after its amendment) and only clarification by way of explanation has been added thereto, it implies that even prior to 01.03.2011, such definition included trading activity also. He further submitted that cenvat credit availed for the input services which go into trading activity of selling of cars is reversible under Rule 6 of the Cenvat Credit Rules, 2004. To substantiate his above stand, the ld. D.R. has relied on the decisions of this Tribunal in the case of Metro Shoes Pvt. Ltd. vs. CCE, Mumbai-I reported in 2008 (10) STR 382 (Tri. Mum.), Orion Appliances Ltd. reported in 2010 (19) STR 205 (Tri. Ahmd.), Loreal India Private Ltd. vs. CCE, Pune-I reported in 2012 (281) ELT 113 (Tri.) and Mercedez Benz India Pvt.....

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....ces. Rather, some portion of the input services has been used for trading activity of selling cars. In my view, trading activity cannot be termed as a service. Accordingly, cenvat credit on input services attributable to trading activity will not be available to the appellant. In such eventuality, the only recourse left to the appellant is to segregate the quantum of input service attributable to trading activity and exclude the same from the records maintained for availment of credit, which in the present case, admittedly has not been done by the appellant. 7. With regard to the findings of the authorities below that the appellant should discharge the cenvat benefit availed on the trading activity by applying the formula prescribed in R....

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....ertaking activities which cannot be called a service or which cannot be called manufacture, that activity goes out of the purview of both Central Excise Act as well as Finance Act, 1994. Therefore, we have a situation where an assessee would not be eligible to take input Service tax credit on an output which is neither a service nor excisable goods and at the same time there is no provision to cover situations where an assessee is providing a taxable service and is undertaking another activity which is neither a service nor manufacture. In such a situation the only correct legal position appears to be that it is for the appellant to choose and segregate the quantum of input service attributable to trading activity and exclude the same from ....