2019 (3) TMI 609 – CESTAT CHENNAI – TMI – CENVAT Credit – common input service used for trading activity and manufacturing activity – High Seas Sales – Rule 6(3) of CCR, 2004 – Held that:- The high-sea sales has taken place outside the jurisdiction of Central Excise authorities.
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The Tribunal in the case of M/s. Rajpetro Specialities Pvt. Ltd., [2019 (2) TMI 7 – CESTAT CHENNAI] had occasioned to analyse the very same issue, where it was held that when High Sea Sales take place outside the territorial waters, it cannot be understood how such sales can be considered as an exempted service (trading) so as to fall within the ambit of Rule 2(e) of the CENVAT Credit Rules, 2004.
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When the alleged trading activity has occurred outside the jurisdiction of Central Excise authorities as well as Finance Act, 1994, the demand cannot sustain – appeal allowed – decided in favor of appellant. – E/41885/2018 – FINAL ORDER NO. 40414/2019 – Dated:- 7-3-2019 – Smt. Sulekha Beevi C.S, Judicial
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the demand amount along with interest and also for imposing penalties. After due process of law, the original authority confirmed the demand of ₹ 12,98,151/- along with interest and imposed equal penalty. In appeal, the Commissioner (Appeals) upheld the same. Hence this appeal. 2. On behalf of the appellant, the learned counsel Shri M. Karthikeyan submitted that the allegation is that the appellants have used common input services for trading (high-sea sales) and also manufacturing activity. He explained that the trading has occurred beyond the territorial jurisdiction of Central Excise authorities and, therefore, the said demand alleging that trading is an exempted service cannot sustain. He relied upon the decision of the Tribunal in the case of M/s. Rajpetro Specialities Pvt. Ltd., Vs The Principal Commissioner of GST & CE, Chennai North Commissionerate reported in 2019 (2) TMI 7 – CESTAT Chennai and the decision in the case of M/s. Ramboll Imisoft Pvt. Ltd. Vs Commissione
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, the discussions in para 6 of the said order is reproduced below:- The appellant is aggrieved by the rejection of refund claim. The allegation of the Department is that the appellant is engaged in manufacturing as well as trading activity and that common inputs/input services have been used for the manufacturing activity as well as trading activity. Since they did not maintain proper accounts they have to follow the procedure in Rule 6(3). As the appellant did not exercise option to reverse proportionate Credit, they have to pay an amount equal to 6% of the value of exempted services. The High Sea Sale transactions are considered by the Department to be trading activity falling within Rule 2(e) of CCR, 2004. The area beyond 200 nautical miles from the shore is called High Sea‟. The transaction of sale in such cases commences outside the territory of India and is also concluded outside the territory of India. If a buyer (importer) wants to sell the consignment to a third party be
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