2017 (11) TMI 1331

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.... parts falling under Chapter 84 & 85 of CETA, 1985 for domestic and export markets. They are also registered with the Central Excise Department and are also registered with the Service Tax as provider of services. During the course of the audit, it was observed that the appellants apart from the activities of manufacturing and providing taxable output service were also engaged in trading activity. They have availed cenvat credit on certain common inputs services that were used/utilized in or in relation to their trading activity. This resulted in the issuance of show-cause notice demanding irregularly availed credit along with interest and penalty. After following the due process of law, the original authority confirmed the demand of servi....

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....f proportionate credit to be ascertained in terms of the formula prescribed under explanation 1 to Rule 6(3D) for the period prior to 01.03.2011. The proportionate credit if any to be reversed is only Rs. 81,280/- (Rupees Eighty One Thousand Two Hundred and Eighty only) and Rs. 84,620/- (Rupees Eighty Four Thousand Six Hundred and Twenty only) for the year 2007-08 and 2008-09 respectively. For this submission, he relied upon the following decisions: a) Sumitomo Corporation India Pvt. Ltd. V. CST, Delhi - 2017 (50) S.T.R. 299 (Tri.-Del.) b) TFL Quinn India Pvt. Ltd. V. CCE - 2016-TIOL-856-CESTAT-HYD. c) Mercedes Benz India (P) Ltd. V. CCE - 2015 (41) S.T.R. 577 (Bom.) 3.1. He further submitted that the entire demand in the present cas....

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....e case of Orion Appliances in 07.05.2010 and the said decision also noted that there is no provision for reversal of credit in the Cenvat Credit Rules. Rule 2(e) was thereafter amended in 01.03.2011 to include trading as an exempted service and Rule 6 was amended incorporating the formula for providing the mechanism for reversal of credit. He also submitted that the issue is one relating to interpretation of law and the appellant has not acted with intent to evade duty and therefore longer period of limitation is not invocable as the issue relates to interpretation of law. For this submission, he relied upon the following decisions: a) CST V. AVL India Pvt. Ltd. - 2017 (4) GSTL 59 (Tri.-Del.) b) TFL Quinn India Pvt. Ltd. V. CCE - 2016-T....

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....al Interlinks has held that the assessee cannot avail cenvat credit of the common input services attributable to trading activity and also upheld the penalties imposed on the assessee. 5. After considering the submissions of both the parties and perusal of the material on record and after going through the various decisions relied upon by both the parties, I find that the Department was well aware of the trading activity carried on by the appellant which is clear from the letter dated 03.03.2010 which is on record and the audit note dated 12.01.2010. The letter dated 03.03.2010 was written by the Department to the appellant asking for the details of credit commonly attributable to manufacturing and trading and thereafter the details were s....