TaxTMI 
TaxTMI 
2019 (6) TMI 1327
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....t was adjudicated vide the impugned order dated 30.5.2014, wherein the learned Commissioner of Central Excise & Service Tax, Pune has confirmed the proposed demand of Cenvat amount of Rs. 98,61,213/- along with interest and also imposed equal amount of penalty on the appellant. Certain amount deposited by the appellant prior to adjudication of the matter was appropriated in the impugned order. In support of denial of cenvat benefit, the learned adjudicating authority has held that trading activity undertaken by the appellant during the disputed period was neither to be considered as a service nor a manufacturing activity and hence, it cannot be treated as an exempted service, defined under Rule 2(e) of the Cenvat Credit Rules, 2004. Feeling aggrieved with the impugned order dated 30.5.2014, the appellant has preferred this appeal before the Tribunal. 2. The learned Chartered Accountant appearing for the appellant submitted that the amendment brought in the definition of "exempted services" is clarificatory in nature and therefore, the trading activities have to be treated as exempted service even for the period prior to April 2011. He further submitted that since trading activit....
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....ot be applied with retrospective effect. 4. Heard both sides and examined the case records. 5. It is an admitted fact on record that during the disputed period 2008-09 to 2010-11, the appellant had availed Cenvat credit of service tax paid on common input services namely, real estate agent's service, cleaning service, repair and maintenance service and security service for both the category of activities undertaken by it i.e. trading of goods and for provision of the taxable output services. Rule 3 ibid entitles a provider of taxable service to take Cenvat credit of duties and taxes paid on the inputs, input services and capital goods. However, an embargo has been created in Rule 6 ibid, which is to the effect that the Cenvat credit shall not be allowed on the input or input services used for providing the exempted services. The said Rule mandates that in case of availment of common input or input services for providing both the taxable and exempted service, the service provider should maintain separate records in respect of uses of input/input services in respect of both the category of services and in absence of non-maintenance of records, to follow the procedures laid down....
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.....03.2011 with retrospective effect inasmuch as, in such an eventuality, the amending notification/Rules, 2011 would have made effective either from the date of publication of the said notification in the official gazette or from the date of enactment of the Cenvat Rules in 2004. 5.4 Further, the legislative intent or mandate to levy duties or taxes on the goods and services is derivatives of the supreme law i.e. the Constitution of India. The yardstick was formulated in the supreme law, in the way that, in case of manufactured goods, the incidence of levy of Central Excise duty is on the activities of manufacture of excisable goods in India; and that in respect of levy of service tax, there must be involvement of two entities/persons, one is the service provider and the other is the service receiver. The activity of trading of goods is not confirming to either of the legislative mandates of manufacture or provision of service, exigible to Excise Duty under the Central Excise legislation of 1944 or the provisions of the Finance Act, 1944, governing the service tax issues. Therefore, insertion of the explanation clause in the definition of "exempted services" in the Cenvat statute....
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....ied retrospectively. Thus, we do not find any merits in the appeal filed by the appellant. 6. In this case, the department had issued the show cause notice on 23.10.2013, seeking for recovery of the irregularly availed Cenvat credit by the appellant during the period 2008-09 to 2010-11. The provisions of Rule 14 ibid read with the proviso to Section 73(1) of Chapter V of the Finance Act, 1994 were invoked for effecting recovery of the alleged demands. Section 73(1) ibid provides the manner of recovery of service tax not levied or paid or short levied or short paid. As per the statutory mandates, in such an eventuality, the show cause notice was required to be issued within one year from the relevant date. However, in the proviso clause appended to Section 73(1) ibid, it has been mandated that where any service tax has not been levied or paid or has been short levied or short paid by reason of fraud; or collusion; or wilful misstatement; or suppression of facts; or contravention of the provisions of Chapter V or the rules made there under with intent to evade payment of service tax, instead of the period of one year, the show cause notice shall be issued within the period of five....