TaxTMI 
TaxTMI 
2018 (11) TMI 463
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....xiliary Service, Business Support Service and Information Technology Software Service and availing the CENVAT credit on input services. During verification of the records of the unit by the departmental audit team for the period 04/2011 to 09/2015, it was noticed that the appellant, who is registered under Service Tax for providing the above mentioned services, was also engaged in 'trading' of goods which is an exempted service in terms of the provisions of CENVAT credit Rules, 2004. The appellant had availed the CENVAT credit to the extent of Rs. 7,06,861/- on purchase of the devices viz., "CR-200B device". Since the said device was not used for providing any output service but used only for trading purposes, the availment of CENVAT credit....
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....ology and to track asset in real time basis, there is a requirement of a hardware i.e. CR-200B device, which gets integrated using unique numbering or identification for tracking. Without these devices, it is not possible to provide telematics services. He further submitted that these devices are procured by the appellant and given on hire/free of cost to the service recipient but the ownership of the devices is not transferred to them. He further submitted that as the devices are used for providing output service, they are eligible to claim CENVAT credit on the input used for providing output taxable services. When the devices are sold to the service recipient, credits are not availed as the same amounts to trading. Learned counsel also su....
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....tenable in law because the appellants have issued the invoice on which they have paid VAT under the Karnataka VAT Act. Further, I find that the assessee has not maintained the proper record of inventory used and inventory traded. The learned Commissioner (A) after considering the entire evidences and the grounds raised by the appellant has come to the conclusion that the appellant has not been able to provide documentary evidence to show CR-200B devices in question have been used to provide output service to their clients. Further, the learned Commissioner (A) has observed that the appellant has raised separate invoices for subscription charges and has also discussed about few invoices brought on record. It is pertinent to reproduce the rel....
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.... show that output service has also been provided by the appellant in respect of such devices. Since trading activity is an exempted service, the appellant is not eligible to avail CENVAT credit on such devices. In view of the above discussion and findings, I find no infirmity in the impugned order passed by the original authority. 6.1 Further, in view of the reasons given by the learned Commissioner (A), I don't find any infirmity in the impugned order wherein it has been held that the appellant is not eligible to avail CENVAT credit on such devices as far as imposition of penalty under Section 78 is concerned, I find that there was ambiguity in the issue and it relates to interpretation of law. Further, I find that the appellants have sh....