TaxTMI 
TaxTMI 
2016 (11) TMI 1106
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....08-09 13,551 13,551 5000 E/3091/2011 2008-09 49,065 49,065 5000 E/3092/2011 2008-09 5,68,564 5,68,564 5000 E/3093/2011 2008-09 3,72,775 3,72,775 5000 E/3094/2011 2008-09 1,038 1,038 5000 E/3095/2011 2008-09 19,777 19,777 5000 E/2438/2012 2009-10 8,71,319 8,71,319 5000 E/2439/2012 2009-10 1,27,036 1,27,036 5000 E/2440/2012 2009-10 1,03,677 1,03,677 5000 E/2441/2012 2009-10 54,704 54,704 5000 E/2442/2012 2009-10 23,56,367 23,56,367 5000 E/2443/2012 2009-10 6,08,232 6,08,232 5000 E/2444/2012 2009-10 4,79,693 4,79,693 5000 E/27710/2013 2010-11 7,22,183 7,22,183 5000 E/27711/2013 2010-11 36,477 36,477 5000 E/27712/2013 2010-11 2,34,433 2,34,433 5000 E/27713/2013 2010-11 20,19,026 20,19,026 5000 E/27714/2013 2010-11 44,187 44,187 5000 E/27715/2013 2010-11 19,13,087 19,13,087 5000 TOTAL 107,56,104 107,56,104 1,05,000 2. Briefly, the facts of the case are that the appellant is en....
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.... before the Tribunal. 3. I have heard both the parties and perused the material on record. 4. The learned counsel for the appellant submitted that the period of dispute in all the appeals is for the years 2008-09, 2009-10 and 2010-11. He further submitted that the trading activity was regarded as exempted service by amending definition in Rule 2(e) only with effect from 1.4.2011 and prior to 1.4.2011, the trading activity was not construed as exempted service at all. He further submitted that the said amendment is prospective and not retrospective as the Government cannot make amendment retrospectively as held by the Hon'ble Supreme Court in the case of Cannanore Spg. & Wvg. Mills Ltd. Vs. CCE [1978 (2) ELT 375 (S.C.)]. He also submitted that during the period of dispute, the provisions of Rule 6 of the Cenvat Credit Rules was inapplicable to the appellant. He further submitted that as a consequence of the said amendment to the said Rule 2(e) effective from 1.4.2011, the Government also inserted the definition of value in the case of trading activity for the purpose of Rule 6(1), 6(3) and 6(3A) of the Cenvat Credit Rules. Consequently the machinery mechanism for reversal of p....
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.... 182 (C.A.)] (xii) The Cannanore Spg & Wvg. Mills Ltd. Vs. CCE [1978 (2) ELT 325 (SC)] (xiii) ITO V. M.C. Ponnose [AIR 1970 SC 385, 388] 5. On the other hand, the learned A.R. defended the impugned orders passed by the Commissioner (Appeals) and filed written submission in support of his various contentions. The written submission of the learned A.R. is given below : The appellant is a manufacturer of pharmaceutical products and also gets the same manufactured by other manufacturers on loan license basis. This activity of goods manufactured by other manufacturers which are common in pharma industry and the goods manufactured by loan licensee is only traded by the appellant. The appellant avails Cenvat credit at their head office and are registered under service tax provisions as an input service distributor and distributes the credit to their manufacturing units. There are certain goods manufactured by the loan licensees which are either exempted or non-dutiable. Appellant claims that they have neither availed any Cenvat credit on this activity nor distributed the same to any of their manufacturing unit. However, the appellant h....
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....acturing activity nor an output service. This view has been upheld by the Hon'ble High Court of Madras in the case of M/s FLSmidthpvt., Ltd., Vs CCE., reported in 2014-TIOL-2186-HC-MAD-CX and other citations given on the date of hearing held on 7.11.2016. The Madras High Court has also upheld the suppression aspect as well in such cases, which is akin to the case on hand. The Contentions of the appellant and the department s view are as follows:- i) The trading was a service which was subsequently exempted with effect from 1.04.2011. This view is not correct in as much as trading is neither a manufacturing activity nor a service as per Finance Act, 1994. Therefore, question of availing CENVAT in respect of Trading activity either prior to 1.4.2011 or after that date does not arise, for the reasons given above. ii) There is no mechanism to ascertain the value of input services attributable to Trading. This view is also not correct for the reasons that appellant knows the turn over of trading and manufacturing. According to this ratio, the proportionate credit has to be reversed. iii) Limitation. This averment of the appellant is not tenable inasmu....
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...., it cannot be considered as an exempted service also. It is pertinent to note that the trading activity has been specifically covered as exempted service with effect from 1.4.2011. This amendment in the definition in Rule 2(e) was brought into effect on 1.4.2011 and as per the learned A.R., this amendment is only a clarification and is applicable prospectively. Further this issue whether the appellant is entitled to take Cenvat credit with regard to common input service attributable to trading activity has been recently considered by the Hon'ble High Court of Madras in the case of M/s FLSmidth Pvt. Ltd. Vs. C.C.E. reported in 2014-TIOL-2186-HC-MAD-CX where in the Hon'ble High Court has framed the following substantial question of law :- 1) Whether in the facts and circumstances of the case, the Tribunal was right in holding that the activity of trading to be considered as exempted service for the period prior to 1.4.2011 even though the same has been identified as an exempted activity only from 01.4.2011? 2) Whether in the facts and circumstances of the case, the Tribunal was right in giving effect to the amendment introduced to the definition of exempted service....