2018 (5) TMI 1419

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....ng and servicing of two wheeler motor vehicles as authorized dealer of Hero Honda Motors Ltd. They are also availing Cenvat credit of service tax paid by them on various input services viz. : Telephone, Advertising, Renting, Insurance, Banking, other financial services, maintenance and repair, courier, security services etc. as per the provisions of Cenvat Credit Rules, 2004. 2. The Department had contended that the appellant has availed full quantum of Cenvat credit on service tax paid on various services as mentioned above which were also used for the appellants trading activity of sale of motor vehicles and parts thereof. It has also been argued that in terms of provisions of Rule 6 (1) of Cenvat Credit Rules, 2004, the Cenvat credit is....

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....459/- of input by credit attributable to the trading activity was demanded as per the provisions of Cenvat Credit Rules, 2004 readwith Section 73 (1) of the Finance Act, 1994. 4. We have heard both sides and perused the appeal record. 5. We find that the issue at hand is no more res-integra, in view of the decision of this Tribunal in the case of Mercedes Benz India Pvt. Ltd. vs. CCE, Pune - I - 2014 (36) S.T.R. 704 (Tri. - Mum.). The decision of this Tribunal has also been affirmed by the Hon'ble Mumbai High Court reported as 2016 (41) S.T.R. 577 (Bom.). The relevant paragraphs in the said decision of this Tribunal are extracted herein below :- "16. In view of the above, we have come to the conclusion that trading was not a service and....

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....nto production process like labour, electricity and many other services and it will not be appropriate to take the value addition. In support of his contention that in case of traded goods only value addition should be taken, ld. Sr. Advocate took us through the judgment of the Court (5th Chamber) dated 14-7-1998 in case C-172/96 which was passed on a reference under Article 177 of the EC Treaty by the High Court of Justice of England and Wales, Queen"s Bench Division. We have gone through the said judgment carefully. In the said case, the issue was how to determine the turnover for purpose of value added tax in case of transactions in different currencies by the First National Bank of Chicago. The Bank used to purchase various currencies a....

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.... properties for earlier period and hence determine the wealth-tax. It is in this context that the Hon'ble Supreme Court has taken a view that the same would be applicable to all the proceedings pending at the time of its enactment. In the present case, as mentioned earlier, it is not the computation of tax but apportionment of the credit of service tax on input services availed for manufactured goods and traded goods. As we have already held that trading was not a service and therefore cannot be considered as an exempted service before 1-4-2011, therefore, the substantive provision itself did not exist before the said date. Under the circumstances, we are of the view that the said judgment is not applicable in the facts and circumstances of....