TaxTMI 
TaxTMI 
2019 (8) TMI 1644
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....d in manufacture of Gas Turbines, Pumps, Bowl Mills etc., falling under Chapters 84 and 85 of the Central Excise Tariff Act, 1985. Apart from undertaking the manufacturing activities, the appellant is also engaged in the activity of trading of bought out goods. Appellant avails Cenvat credit in respect of the Central Excise duty paid on the inputs and service tax on the input services. During the disputed period April, 2007 to March, 2012, the appellant had availed common input services used/utilised for both manufacturing of excisable goods and for the trading activities. Taking of such Cenvat credit was disputed by the Department on the ground that since the appellant did not comply with the requirement of Rule 6 of the Cenvat Credit Rule....
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....ime. In this context, he submits that in absence of the elements viz., fraud, suppression, misstatement, with intent to defraud Government revenue, the extended period of limitation cannot be invoked and the show cause notice should only be confined within the normal period provided under the main part of sub-section (1) of Section 73 ibid and the proviso clause appended thereto cannot be applied. He has relied upon the decision of this Tribunal in the case of Commissioner of Service Tax, New Delhi v. AVL India Private Ltd. [2017 (4) G.S.T.L. 59 (Tri. - Del.)], to state that in absence of the elements present in the proviso to sub-section (1) of Section 73 ibid, the extended period cannot be invoked, justifying confirmation of the demand be....
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....ssue whether, the activity of trading should fall within the ambit of exempted service was highly contentious and there were divergent views by the judicial forums. Even, the issue regarding retrospective or prospective application of such explanation clause was also highly debatable. Thus, under such circumstances, payment of amount as per the requirement of sub-rule (3) of Rule 6 ibid was not diligently complied with by the appellant, as asserted. However, it is noticed that based on the records maintained by the appellant, the Cenvat amount attributable to the common input services used for the trading activity was reversed. On proper scrutiny of the case records, we are convinced that the extended period of limitation cannot be invoked ....
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....aving availed the credit on common input services, without maintaining separate accounts, it is not open to the respondent to claim that there is no need for reversal of proportionate credit attributable to their activity of trading. If trading is not to be considered as an "exempted service" (or service at all) then the Cenvat Credit Scheme itself is not available to a trader. The respondent, being a trader as well as output service provider, has availed credit on common input services. Their failure to maintain separate accounts cannot give them an advantage of taking full credit on all common input services. This will have effect of nullifying the very principle that no credit is available when there is no taxable output service. In othe....
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.... that the respondent is liable to reverse the credit attributable to the trading activities. Considering the issue is of legal interpretation and there are different decisions on the matter, we find that the demand is to be restricted to normal period and no penalty is imposable on the respondent. 7. In view of the above discussions, we do not find any merits in the impugned order, insofar as it has confirmed the adjudged demands under the extended period of limitation. With regard to the demand pertains to the normal period, the Lower Adjudicating Authority has denied the benefit to the appellant on the ground that the conditions laid down in Rule 6(3A) have not been duty complied with. It is an accepted principle of law that non-f....