2018 (11) TMI 831 – CESTAT KOLKATA – TMI – CENVAT Credit – common input services for trading goods – case of appellant is that the trading of goods has come into the exempted category only since 31.03.2011 and therefore the explanation adding ‘trading’ in the exempted service category cannot be made retrospectively applicable – also appellant has reversed back the amount of common input service credit availed by them.
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Held that:- For the period upto 01.04.2011, 100% CENVAT credit is available for certain services as per Rule 6(5) of the CENVAT Credit Rules, 2004. Trading was not included in ‘Exempted Service’ upto 31-03-2011 and prior to that the same was not considered as exempted services for the purpose of Rule 6(3) of the CENVAT Credit Rules, 2004. Therefore, there was no need to demarcate between taxable as well as exempted services for the purpose of availment of CENVAT Credit.
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The Appellant have already reversed ₹ 4,93,236/- as portion of Common CENVAT Credit
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8 – .FO/76649-76650/2018 – Dated:- 29-8-2018 – Shri P.K.Choudhary, Member (Judicial) Shri Ravi Raghavan, Advocate & Shri Harsh Shukla, CA for the Appellant (s) Shri S.Mukhopahdyay, Suptd.(AR) for the Respondent (s) ORDER Per Shri P.K.Choudhary Briefly stated the facts of the case are that the appellants are engaged in the business of Authorized Dealer of Maruti Suzuki Four Wheeler and also providing services of authorized service station and is registered with the service tax under category of Authorized Service Station (Servicing of Motor Vehicles) and Business Auxiliary Service . Pursuance to the Department audit, an audit observation was issued demanding service tax on various issues such as service tax on DSE incentive, Registration Fee, Cancellation Charges and Legal Fee paid to advocate. Sl.No. Appeal No. Period 1. ST/76239/2018 (Order-in-Appeal No.19/ST/BBSR-GST/2018 dated 30.01.2018) 2008-09 2012-2013 2. ST/76238/2018 (Order-in-Appeal No.20/ST/BBSR-GST/2018 dated 30.01.2018
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ri.-Mum)]. Ld. Advocate also submits that they have reversed the credit amount in terms of Rule 6 of the Cenvat Credit Rules, 2004, however, this fact has not been accepted nor examined by the Department and the amount has been upheld without any verification. 5. Ld. DR reiterates the orders of the lower authorities. 6. Heard both sides and perused the appeal records. 7. I find that the appellant has not denied the fact that they have been availing cenvat credit on the service tax paid on the common input services for trading goods. However, it has been contended that the trading of goods has come into the exempted category only since 31.03.2011 and therefore the explanation adding trading in the exempted service category cannot be made retrospectively applicable. It is also observed that the appellant has reversed back the amount of common input service credit availed by them. 8. I find that the appellant has availed CENVAT credit amounting to ₹ 21,05,711/- (but Credit utilized
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Rules, 2004. 11. It is submitted that for the purpose of Rule 6, exempted service provided by the appellant shall be the trading of goods by virtue of Rule 2(e) of the CENVAT Credit Rules as read with explanation (I) (c) to the said Rule. It is further, submitted that prior to 01.04.2011, trading of goods was not covered under the definition of exempted services, it was first introduced w.e.f. 01.04.2011 and at the time the exempted services were defined as: Exempted Services means taxable services which are exempt from the whole of the service tax leviable thereon, and includes service on which no service tax is leviable under Section 66 of the Finance Act, 1994 and taxable services whose part of the value is exempted on the condition that no credit of inputs and input services, used for providing such taxable services, shall be taken; Explanation- For the removal of doubts, it is hereby clarified that exempted services includes trading 12. In support of his submissions, the ld. Advoc
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Rule 6(5) 151,158 154,885 192,963 499,007 Grand Total 2,19,082 1,90,121 3,59,565 7,68,768 13. I find from the details submitted, that based on the above computation, the Appellant have already reversed ₹ 4,93,236/- as portion of Common CENVAT Credit attributable to both taxable as well as for trading activity in view of provision of Rule 6 of the CENVAT Credit Rules, 2004. The amount arrived as above has been deposited along with interest and copy of challans have also been submitted. The Appellant has submitted that during the FY 2013-14, the total amount of CENVAT credit availed by the appellant is ₹ 14,77,261/- which includes CENVAT Credit of taxes paid on Capital Goods, Services exclusively used for taxable services and common input services. The detail break up of CENVAT Credit provided by the Appellant is briefly summarized as under: A Total amount of CENVAT availed which is disallowed by the Authority. 14,77,261 B CENVAT Credit availed on CG used for Taxable & Ex
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s of Rule 6(5) of Cenvat Credit Rules, 2004. It is undisputed that the service tax credit availed is on the services as mentioned in Rule 6(5), the credit of the entire whole amount of service tax has to the appellant. When the differential amount has been paid by appellants under Rule 6 of Cenvat Credit Rules, 2004 and discharged the service tax has pointed out by the department before issuance of the show cause notice. Under the provisions of 73(3) of the Finance Act, 1994, the proceedings should have been completed on payment of tax amount along with interest. The credit amount which has been reversed by the appellants has neither been accepted or examined by the department and the amount has been upheld without any verification. The demand for the extended period of limitation is set aside. The penalty as imposed under Section 78 of the Finance Act, 1994 is also set aside and for the limited purpose of verification and re-quantification of demand for the normal period, the matter i
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