TaxTMI 
TaxTMI 
2018 (5) TMI 1406
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.... Filters and related products' and also involved in trading activities of Air Filters and related products and are availing cenvat credit on input and input services. During the audit it was observed that in addition to the manufacture of products the appellants are also trading in the goods which is a deemed service exempted from payment of service tax. It was observed by audit that as per Rule 6(1) of Cenvat Credit Rules, 2004 they are not eligible to take credit of input and input services used in or in relation to trading activity which is deemed to be exempted service. In case input/input services are commonly used both for trading and manufacturing of dutiable goods then a separate account has to be maintained for the receipt, con....
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....e demand was issued for Rs. 1,13,982/- (Rupees One Lakh Thirteen Thousand Nine Hundred and Eighty Two only) which is three times the total common input service availed. He further submitted that in order to buy peace, the appellants have reversed the entire common input service credit of Rs. 40,687/- (Rupees Forty Thousand Six Hundred and Eighty Seven only) along with interest of Rs. 13,003/- (Rupees Thirteen Thousand and Three only) without apportioning the same between the taxable goods and exempted service to avoid litigation. He further submitted that once they reversed the entire cenvat credit the demand under the provisions of Rule 6(3)(i) of Cenvat Credit Rules is not sustainable. In support of this submission, he relied upon the rat....
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....he Cenvat Credit Rules 2004 vide Notification No. 13/2016 dated 01.03.2016. The sub-rule provides that where a manufacturer or a provider of output services has failed to exercise the option under sub-rule (3) and follow procedure provided under sub rule and follow the procedure provided under sub rule 3A, the central excise officer competent to adjudicate the case based on the amount of cenvat credit involved, may allow such manufacturer or provider of output service to follow the procedure and pay the amount referred to in clause (ii) of sub-rule (3), calculated for each months, mutatis-mutandis in terms of clause (c) of Sub Rule 3A, with interest calculated at the rate of 15% per annum from the due date for the payment of amount for each....