TaxTMI 
TaxTMI 
2026 (2) TMI 898
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....re M/s. SKF India Ltd., the Appellant is manufacturing and clearing goods including 'Ball bearing' and also taken the service tax registration. Appellant was availing CENVAT credit on inputs, capital goods and input services under CENVAT Credit Rules, 2004. Since Appellant is engaged in trading of 'Ball Bearings', investigation was commenced and during investigation, it appeared that for the period from 2006-2007 to 2010-2011 upto January 2011, CENVAT credit availed on common input services used for manufacturing as well as trading activities in their Input Service Distributor (ISD) Pune Account was passed to their Pune manufacturing unit and the balance CENVAT Credit of 33% was availed at their Bangalore Unit on being passed on by their ISD, Pune. Since ISD can distribute only the credit of service tax paid on services used in relation to manufacture of dutiable goods and in providing taxable services, considering that the Appellant is not maintaining separate accounts for service tax credit for the manufactured and traded goods, proceedings were initiated and show cause notice (SCN) dated 03.02.2012 was issued. Adjudication Authority as per the impugned order held....
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....sioner of Central Excise, Ghaziabad - (2023) 8 Centax 41 (Tri.-All) (18-08-2022] v. Marudhan Motors Vs. Commissioner of Central Excise & S.T., Jaipur-II - 2017 (47) S.T.R. 261 (Tri.-Del) [29-07-2016] vi. Commr. of C. Ex., Bhopal Vs. My Car (Bhopal) Pvt. Ltd., - 2019 (22) G.S.T.L. 273 (Tri.-Del) [31-01-2018] vii. Tricity Auto Vs. Commissioner of C. Ex., Chandigarh-II - 2016 (44) S.T.R. 601 (Tri.-Chan) [07-04-2016] viii. Infinium Motors Guj. Pvt. Ltd. Vs. Commissioner of Service Tax, Ahmedabad - (2023) 11 Centax 245 (Tri.-Ahmd) [30-09-2022] ix. Franke Faber India Ltd. Vs. Commissioner of C. Ex., Aurangabad - 2017 (52) S.T.R. 155 (Tri.-Bom) [20-01-2017] x. Adani Energy Ltd Vs. C.S.T., Ahmedabad vide Final Order No. A/10520/2022 dated 15.03.2022 5. The Learned Chartered Accountant (CA) for the Appellant further submits that in the case of Lally Automobiles Vs. CC-[2014 (35) S.T.R. 26 (Del)], while computing the CENVAT Credit to be reversed due to trading during the period prior to April 2011, the appellant adopted the formula introduced vide Explanation 1(c) below Rule 6(3D) of Cenvat Credit Rules, 2004, inserted vide Notificatio....
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.... Overseas - 2015 (317) E.L.T. 585 (Tri-Del) 3 Custom House Agent service 85,19,803 Sundaram Clayton Ltd - 2018 (43) S.T.R. 741 (Tri-Chennai); Magal India Pvt. Ltd - (2023) 5 Centex 159 (Tri-Bom) 4 Cargo Handling agent Services 20,95,832 Maruti Suzuki (India) Ltd - (2024) 16 Centex 4 (Tri-Chan) 5 General Insurance Services 23,10,057 AEC Intermetalli Ltd - (2023) 9 Centex 198 (Tri-Del); Capgemini Technology Services India Ltd - (2023) 29 Centex 407 (Tri-Bom) 6 Rent a Cab Service 22,38,871 Expro Ltd - (2023) 7 Centex 92 (Tri-Bom) 7 Storage and warehousing Services 19,63,622 Lifelong Meditech Ltd - 2016 (42) S.T.R. 828 (Tri-Chan) 8 Construction service 17,85,847 Sundaram Clayton Ltd - 2018 (43) S.T.R. 741 (Tri-Chennai); Lupin Ltd - 2012 (23) S.T.R. 261 (Tri-Mumbai) 9 Cleaning service 14,85,833 Sundaram Clayton Ltd - 2018 (43) S.T.R. 741 (Tri-Chennai); Indo Alusys Industries Ltd - (2023) 6 Centex 42 (Tri-Del) 10 Clearing and forwarding agent Service 14,35,833 Sundaram Clayton Ltd - 2015 (43) S.T.R. 741 (Tri-Chennai); Indo Alusys Industries Ltd - (2023) 6 Centex 42 (Tri-Del) 11 Commercia....
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....024) 18 Centex 159 (Tri-Lib) 30 Secretarial service 419 - 31 Mandap service 413 Omega Healthcare Management Services Pvt. Ltd - (2023) 2 Centex 49 (Tri-Bang) Total 4,59,00,035 7. As regards invoking the extended period of limitation, Learned Chartered Accountant (CA) submits that the demand up to January 2011 has been confirmed by invoking extended period of limitation. In this regard, Learned Chartered Accountant (CA) submits that Appellant had obtained first stage dealer registration for its depots where from trading was being undertaken. The Learned Chartered Accountant (CA) also drew our attention to the registration certificate and the sample invoice copies, Form RC under Rule 9 of the Central Excise Rule, 2002. Thus, the demand confirmed by invoking the extended period of limitation based on the show cause notice issued on 03.12.2012 is unsustainable. 8. The Learned Chartered Accountant (CA) further submits that it is well settled that when complex interpretation of law is involved, conflicting or divergent judgments are available, invocation of extended period of limitation and levy of penalty are unjustifiable. In this....
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....s taken Cenvat credit on the basis of ISD invoices received from Pune; since the ISD was not taking credit of service tax which were exclusively meant for trading activity, the department was not informed of the same. As regards the Appeal filed by Shri. Chandramowli Srinivasan, Director, Finance of M/s. SKF India Ltd, Learned AR reiterated the finding in the impugned order and further submits that in his statement dated 26.07.2011, inter alia stated that; he was taking policy decisions pertaining to taxation matters; he concurs with the statement dated 12.07.2011 of Shri. Vrijendra Patwari, General Manager (Taxation) shown to him and it was the decision of the company to avail Cenvat Credit on service tax paid on common input services which were used in both manufacturing and trading activity. Thus, responsibility to maintain proper record of availment and utilization of CENVAT credit is cast on them. Inspite of the said statutory requirements they availed and utilized Cenvat Credit attributable to services used for trading activities. The above fact is noticed only when the Head Quarters Preventive Unit (HPU) took up investigation on being informed of irregular Cenvat availment a....
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....d under Rule 6(5) of the CENVAT Credit Rules, 2004 and in calculating the proportionate CENVAT Credit attributable to sale of cars; secondly in the formula prescribed under Rule 6(3A) of CCR, 2004, it is only the margin of value addition of the traded cars be considered or otherwise". 14. After detailed discussion on the above issue, the Tribunal held that:- "19. A plain reading of Section 67 of Finance Act, 1994 along with Service Tax (Determination of Value) Rules, 2006, and principles of law settled in this regard, it can easily be construed that the value of taxable services cannot include the value of the material/goods used in rendering the taxable services. Simultaneously, it is an accepted principle that the cost of all ancillary and incidental services for providing the taxable service be part of the value of the taxable service. Applying the said principles to the present case also, that is, in determining the value of non-taxable service i.e. 'trading' of imported cars, it cannot include the value of the imported cars while apportioning the quantum of credit availed on common input services and attributable to the sale of imported cars, but the total ....