2018 (3) TMI 629

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....nts were availing credit on common input services which were used for trading activities as well as for providing output services. Since the credit availed on trading activity is not eligible for credit as well as for the reason that certain input services were used exclusively for trading purpose, two show cause notices dated 19.4.2012 and 12.10.2012 were issued for the period covering from April 2009 to March 2011. After due process of law, the original authority confirmed the demand along with interest and also imposed penalties. Against the said order, the appellants are now before the Tribunal. 2. On behalf of the appellant, Shri S. Muthuvenkataraman, ld. counsel assisted by Ms. Minchu Mariam Punnoose argued mainly on the ground of ....

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....mitted that the appellants were audited by the department during the period of dispute and also all the records were within the knowledge of the department, the details of the communications are tabulated below:- S. No. Date Particulars 1. 11.1.2011 Intimation of internal audit visit 2. 4.1.2011 Appellants letter on the department letter dated 29.12.2010 for credit taken on inputs 3. 29.12.2010 Department letter for short payment of service tax 4. 9.11.2010 CERA audit objections 5. 13.10.2010 Department audit intimation letter 6. 2.12.2009 Department audit intimation letter 7. 24.9.2008 Department audit intimation letter In these circumstances, the question of suppre....

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....enue. Only after 1.4.2011, the position was settled by adding Explanation to the definition of exempted services which made trading activity to be a deemed exempted service. It is very much clear from the facts of the case that the appellant have been maintaining separate records for the common inputs used in trading and taxable output service. This itself brings out the bonafide belief of the appellant that they were under the impression that their activity is an exempted service and would be able to avail credit by following the procedures under Rule 6 (2) and (3). Further, they have been filing service tax returns regularly and they have been subjected to periodical audit. Even in CERA audit, the said objection was not raised on the avai....