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2018 (8) TMI 1448 - CESTAT BANGALORECENVAT Credit - appellant during the period under dispute had undertaken E-1 sales; had supplied goods from manufacturing premises directly to the customer’s site - Trading activity or not? - Rule 6(3)(i) of Cenvat Credit Rules 2004 - whether the trading activity undertook by the appellant for the period July 2010 to March 2015 is an exempted service? Held that:- Rule 6 casted an obligation on the manufacturer or purchaser to reverse such of the cenvat credit if the input on which the cenvat credit availed is used in or in relation to the manufacture of exempted goods and its clearance upto the place of removal or for provision of exempted services which was introduced w.e.f. 01.04.2011. This being prospective in nature, the amended provision cannot be held to be applicable for the first period, i.e., July 2010 to March 2011 - demand set aside. For the second period i.e. April 2011 to June 2012, the definition of ‘exempted service’ was amended by including trading activity, but however, in terms of Rule 6, the value of non-excisable goods shall be the invoice/agreement/contract value and where such value is not available, the same to be determined by using reasonable means consistent with the principles of valuation. In the third period i.e. July 2012 to March 2015, the appellant has submitted that it had followed Rule 6(3A) and reversed an amount of ₹ 5,72,476/-, which again has neither been countered nor disbelieved by the adjudicating authority - for the third period the situation prevailing during first period applies and therefore, as there was no mechanism in the statute to evaluate an exempted service, there is no question of any liability or obligation. Appeal allowed in part.
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