2018 (6) TMI 378 – CESTAT CHENNAI – TMI – CENVAT credit – common inputs used in taxable service as well as trading activities – clearance of goods as such – case of appellant is that they have reversed the credit, as under Rule 3(5), when they have cleared the goods as such – Held that:- The appellants have reversed the credit, as under Rule 3(5), when they have cleared the goods as such. In a normal trading activity, the goods which are procured, are sold and there is no question of availing the credit of such goods or clearing them on the payment of duty.
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In the present case, the appellant has availed credit on the inputs and, in some circumstances, they were not able to use the goods in the manufacture of final products. They have opted to clear the goods as such, under the provision of Rule 3(5) by reversing the credit – demand cannot sustain – appeal allowed – decided in favor of appellant. – Appeal No. E/42615/2017 – Final Order No. 41747 / 2018 – Dated:- 6-6-2018 – Ms. S
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posed input penalty. In appeal, the Commissioner (Appeals) upheld the same. 2. On behalf of the appellant, the learned Counsel, Shri Sai Prasanth, submitted that the appellant had removed the raw materials under Rule 3(5) of Cenvat Credit Rules, after reversing the credit. The inputs/raw materials were removed after payment of duty. Thus, there is no trading as such and the activity cannot be treated as an exempted service. He relied upon the decision in the case of Suyash Auto Press Components and Assemblies Pvt. Ltd. Vs. CCE [2018-TIOL-1424-CESTAT-MUM]. 3. The learned AR, Shri R. Subramaniyan, supported the findings in the impugned order. He submitted that with effect from 01.04.2011, an explanation has been added to the definition of exempted service, clarifying that exempted service includes trading. Thus, when the appellants have removed the inputs as such, the same amounts to trading and, therefore, they are liable to pay an amount of 5%/6% of the value of traded goods. That the
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as such under Rule 3(5) of the Cenvat Credit Rules, 2004 on payment of excise duty which is equal to the cenvat credit. Therefore, Rule 6(3) should not be applied and accordingly the demand is not sustainable. He placed reliance on the following judgments: – (i) CCE, Ahmedabad- II vs Inductotherm (I) Pvt. Ltd. – 2013 (1) ECS (26) (Guj-HC); = 2012-TIOL-929-HC-AHM-CX (ii) AR Casting (P) Ltd. vs. CCE&ST, Chandigarh – (Service Tax Appeal No. 580/2008) (Tri. – Delhi); = 2010-TIOL-245-CESTAT-DEL (iii) Chitrakoot Steel and Power Pvt. Ltd. vs. CCE – 2008 (125) ECC 188 (Tri. -Chennai)= 2008-TIOL-246-CESTAT-MAD 3. Shri S.J. Sahu, learned Assistant Commissioner (AR) appearing on behalf of the Revenue, reiterates the finding of the impugned order. He emphasizes on para 6 of the impugned order. He further submits that all the judgements relied upon by the appellant have been dealt with by the learned Commissioner (Appeals) and the same have been distinguished. 4. I have carefully considered the
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