TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 1708
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.... under section 11AC of the Central Excise Act, 1944 was imposed. 2. The issue, in brief, is that the appellants are engaged in manufacture of Hydraulic/ Fluid Couplings and are also involved in trading activity of imported goods. Further, based on the audit of the company, objection was raised with regard to availment of Cenvat credit attributable to trading turnover on the grounds that trading of imported goods is an exempted service. The appellants, on their own, to avoid litigation and before issuance of SCN, have discharged an amount of Rs.1,59,910/- for the period July, 2013 to August, 2014 being proportionate Cenvat credit attributable to trading activity along with interest of Rs.8,112/- in terms of Rule 6(3)(ii) read with Rule 6(3A....
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....z India (P) Ltd Vs CCE, Pune-I [2015 (40) STR 381] e) Tata Technologies Ltd Vs Commissioner [2016 (42) STR 290 (Tribunal)] 5. Learned Advocate is also contesting the appeal on the grounds of invocation of extended period, primarily on the ground that issue involved is interpretation of provisions and that there is no substantive ground adduced in the SCN alleging deliberate or malafide intention to evade any duty. It is an admitted fact that Rule 6 itself was subjected to several changes at various points of time during the said period. He is also contesting that once the entire amount of proportionate credit has been reversed and they were having sufficient balance of credit lying with them, it would tantamount to credit being not utili....
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....ervices, certain compliances are required to be followed by the appellant, who are otherwise not able to maintain separate accounts for use of such inputs or input service. Insofar as trading being an exempted service or otherwise, we find that the definition of exempted service was amended vide Notification No.03/2011-CE (NT) dt.01.03.2011 w.e.f. 01.04.2011, whereby, by way of an explanation, it was clarified that exempted service includes trading. Moreover, subsequent thereto, w.e.f. 01.07.2012 till 31.03.2016, the trading activity was brought under the negative list of services. However, there was always a dispute whether exempted services also include the activities which are not at all a service in the first instance. Subsequent to 01.....
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.... issue by considering that whenever someone undertakes certain activity which cannot be called service or which is not a manufacture, the activity goes out of the purview of both the Central Excise Act as well as the Finance Act and in such case, assessee would be ineligible for claiming input service tax credit on an output which is neither a service nor an excisable good and only correct legal position would be for the assessee to segregate the quantum of input service attributable to trading activity and exclude the same from the records maintained for availing credit. We find that even though the order did not specifically stated that this has got retrospective effect, it observed that under the circumstances the appellants could not ha....
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....een held that penalty cannot be imposed on the assessee." b) Mahindra & Mahindra Ltd Vs CCE, Mumbai [2018 (364) ELT 1006 (Tri-Mumbai)], wherein, it was held as under: "It is a settled law that when there is an interpretation of law and had general practice amongst the mass, it cannot be said that the assessee has mala fide intention to avail undue benefit. It is also on record that the Appellant have been declaring the availment of Cenvat credit on common input service in their ST-3 return. The Appellant have recorded in their books of account the manufacturing activity as well as trading activity. In such situation, it cannot be alleged on the Appellant that they have suppressed the facts to evade duty. In absence of any mala fide inten....
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....) read with Rule 6(3A) of the CCR. 13. However, it is not clear from the record as to whether the department has accepted this calculation or otherwise. In view of the same, this needs to be cross-checked by the department whether the appellants have reversed the proportionate credit attributable to the trading activity. 14. In view of the discussions in foregoing paras, we remand the matter back to the Original Adjudicating Authority to compute the demand in terms of Rule 6(3)(ii) read with Rule 6(3A) of CCR, 2004 and thereafter, appropriate the same, if already discharged along with interest. It is also clarified that the demand of interest on reversal of credit is regulated by the provisions under CCR and if it was only taken and not u....