TaxTMI 
TaxTMI 
TaxTMI 
2018 (12) TMI 305
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.... Service Tax amounting to Rs. 94,53,475/- and credit amounting to Rs. 1,61,56,514/- availed and utilized during the period from 2008-09 to 2012-13. On adjudication, the demands were confirmed with interest and penalty. Hence, the present appeal. 3. Learned Advocate for the appellants submits that the impugned show-cause notice was issued on the basis of foreign remittance shown in the balance-sheet of the appellant. It is his contention that no attempt was made by the Department to classify the services against which the foreign remittances were received, therefore, the demand is bad in law. However, he submits that entire amount of Service Tax of Rs. 94,53,475/- has along with interest of Rs. 6,61,087/- and also penalty of Rs. 5,36,161/-has been paid before issuance of the Notice. In support, he has submitted a detailed work-sheet reflecting the amount of Service Tax paid against each of the services received and the consideration amount paid to the foreign company with interest and penalty. The relevant challans/receipts evidencing payment of the said amounts. He has submitted that the entire amount of Service Tax was paid under reverse charge mechanism by them being eligible to....
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....equently paid the Service Tax accordingly. He submits that therefore the plea of the Appellant that there is no proper classification of service and computation of demand is not tenable and accordingly unacceptable. Further, he submits that the appellant had availed CENVAT Credit on common input services which they have used during the relevant period for trading activity, therefore, credit to the extent attributable to the trading activity is not admissible to them. In support, the learned AR referred to the judgment of this Tribunal in the case of Commissioner of Service Tax, New Delhi Vs. AVL India Pvt. Ltd. 2017 (4) GSTL 59 (Tri-Del) and the judgment of Hon'ble High Court of Madras in the case of F.L. Smidth Pvt. Ltd. Vs. Commissioner of Central Excise, Tiruchirapalli-2015 (39) STR 373 (Mad); Ruchika Global Interlinks Vs. CESTAT, Chennai - 2017 (5) GSTL 225 (Mad). Further, he has submitted that since the appellant had availed the CENVAT Credit without proper intimation to the Department that the credit availed on input services were also utilized towards their trading activity, therefore, larger period of limitation has been rightly invoked by the Department. In support, he has....
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....s not merit interference and accordingly upheld. 8. On the second issue of recovery of proportionate CENVAT Credit availed on various input services used for trading activity amounting to Rs. 1,61,56,514/- we find that admissibility of CENVAT Credit availed on input services used in providing trading activity, is no more res integra and covered by the recent judgment of this Tribunal in the case of Commissioner of Service Tax, New Delhi Vs. AVL India Pvt. Ltd. - 2017 (4) GSTL 59 (Tri-Del) and AkshOptifiber Ltd. Vs. Commissioner of Central Excise, Jaipur- 2018 (10) GSTL 551 (Tri-Del). In both the judgments, this Tribunal analyzing the amendment to the definition of exempted services w.e.f. 1.4.2011 observed that since trading activity itself is not a taxable service or activity subject to excise duty, therefore, subsequent amendment considering trading activity as 'exempted service' cannot entitle the assessee to avail the proportionate credit on various input services attributable to the trading activity. The Tribunal in the case of AVL India Pvt. Ltd. (supra) has observed as under:- 9. On the second issue, we find that the Cenvat Credit Scheme is available only in respec....
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....ords to show as the manner of usage of such common input services in taxable activity as well as non-taxable activity. Their contention is that trading cannot be considered as an exempted service prior to 1-4-2011 [(before issue of Notification No. 3/2011-C.E. (N.T.)] and as such, there is no application of Rule 6 of CCR for maintenance of separate records, etc. We are not in agreement with such proposition. Admittedly, it is the responsibility of the assessee to follow the provisions of Cenvat Credit Rules, 2004. Rule 9(6) of the CCR Rules states as below:- The manufacturer of final products "Rule 9(6) or the provider of output service shall maintain proper records for the receipt and consumption of the input services in which the relevant information regarding the value, tax paid, Cenvat credit taken and utilized, the person from whom the input service has been procured is recorded and the burden of proof regarding the admissibility of the Cenvat credit shall lie upon the manufacturer or provider of output service taking such credit." 6. The appellants claimed that there is no application of Rule 6 as the trading cannot be considered as an exempted service prior to 1-4-2011. ....
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....ree availment of cenvat credit the primary responsibility that the credit has been correctly taken, is on the manufacturer or availer of cenvat credit as per Rule 9(5) and 9(6). Rule 9(5) very clearly provides that the burden or proof regarding admissibility of the cenvat credit shall lie upon the manufacturer or provider of output service taking such credit. In view of this position, we have no hesitation in holding that the extended period of limitation has been correctly invoked. We also note the judgment of hon'ble Madras High Court in the case of F.L. Smidth Pvt. Ltd. (supra). For the same reason, the penalty imposed under Rule 15 of the Cenvat Credit Rules read with Section 11AC of the Central Excise Act is in order. We also note, as far as the demand of Rs. 1,11,444/- is concerned, appellant has already admitted that the demand of Rs. 49,731/- as these have nothing to do with the manufacture of goods. As far as the remaining demand is concerned, which is relating to the security broker service, etc. for the reasons stated earlier, the same is upheld Penalty imposed in respect of the same is also upheld." It is the primary responsibility of the assessee to take/reverse ....