TaxTMI 
TaxTMI 
2019 (8) TMI 1188
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....ts on inputs is assailed in this appeal. 2. Factual backdrop of this case is that appellant is a Public Limited Company engaged in providing helicopter repair & maintenance, service, trading and coaching services etc. During EA-2000 audit, it was observed that appellant was trading spare parts which was exempted service but it was not maintaining separate accounts for which 6% of the total price of exempted goods under Proviso 6(3)(b) of the CENVAT Credit Rules 2004 was demanded from it by way of Show cause Notice dated 27-06-2004 issued by the Joint. Commissioner, Service Tax, Mumbai-II that was adjudicated upon after receipt of reply to show cause and duty demand along with interest and equivalent penalty on the various provisions of F....
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.... submission is that benefit of 6(3AA) should have been extended to the appellant and demand should have been recomputed on proportionate turnover that would limit the demand to Rs. 1,20,975/- and not to make such huge demand which could be equated with extraction of illegal amount that has been depreciated by this Tribunal in the case of MERCEDES BENZ INDIA (P) LTD. report in 2015(40) S.T.R. 381 (Tri.-Mumbai), judgment dt. 22-10-2018 of CESTAT Mumbai. He also challenged the maintainability of invocation of extended period and imposition of equivalent penalty on the appellant which is Public Sector Undertaking and submitted that Cenvat Credit being not a duty, penalty under Rule(15), is not leviable. 4. Per Contra, Learned AR for responde....
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....bunal)] and stated that clarificatory notes have retrospective effect attached with it. However, as discussed in the I.G. Petrochemicals' case cited Supra, trading is not a service for which explanation appended to section 66 could be conjointly read with the definition of service given in section 65 (44) of Finance Act 1994 that excludes delivery or supply of any goods which is deemed to be a sale within the meaning of clause 29(a) of article 366 of Constitution of India. It is, worthwhile, to reproduce para 6 to 8 of the order to give clarity to the above discussion. "6. In order to ascertain whether trading is a service so that it can be brought into the definition of exempted service as found in Board circular no. 943/04/2011-C....
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....selling of news to agency etc. but these are in different parameters since the instant case is confined to the allegation made in the show-cause notice that there was high sea sale of "Phthalic Anhydride" which department claims to be a exempted service and appellant claimed to have not been covered under tax statute of the country in view of article 286 of Constitution of India. 7. Dispute relating to taxability on sale and levy of duty by the excise authority is not new in its origin and on many score matter had reached the apex court level that necessitated passing of the Constitution (Forty Sixth Amendment) Act, 1982 and going by its Statement of Object and Reason, it can be ascertained that in conformity to the judgment of Hon....
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.... or within territorial boundary of India in which Finance Act, 1994 has its force, cannot be called a service to impose tax liability or deny the credit under Rule 6 of Cenvat Credit Rules." 6. Be that as it may, even the Commissioner (Appeals) had accepted trading to be a service but exempted from Service Tax, in para 9 of his order. He has clearly given his findings that appellant was either required to maintain separate account for receipt and use of input or pay the amount equivalent to 6% of the value of exempted service as per the provision of Rule 6(3) of CCR or pay an amount determined under sub rule 3A of Rule 6 of CCR but in his order, in the operating portion, he rejected the appeal and confirmed Order-In-Original by which app....