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2024 (3) TMI 552 - CESTAT MUMBAICENVAT Credit - trading activity - exempted service - availing cenvat credit of service tax paid on certain input services which were utilized by them for manufacture as well as trading purposes (common input services) - non-maintenance of separate records - HELD THAT:- It is very clear that Hon’ble Supreme Court in CHANDRAPUR MAGNET WIRES (P) LTD. VERSUS COLLECTOR OF C. EXCISE, NAGPUR [1995 (12) TMI 72 - SUPREME COURT] has laid down that once a debit entry is made in respect of a credit entry, then the result is as if that credit entry was never made. In other words, the entire cenvat credit availed on common input services being debited before adjudication and at the time of adjudication, it was as if such credit was never availed. Now on the question whether subsequent to the activity of trading, such debit can be effected. Hon’ble Delhi High Court has held that since the rules have not provided as to how attributable cenvat credit is to be debited and in advance it would not be known as to how much quantum of trading will take place, it is logical that the attributable cenvat credit is debited after the trading activity is over, may be once in a quarter or once in six months - the appellant had debited the entire cenvat credit availed on common input services. Therefore, it is to be treated that they had never availed such credit. When credit on common input services is not availed, the question of payment of 5% or 6% of the value of exempted services will not arise. The confirmation of demand of Rs.2,44,54,675/- is set aside along with interest and equal penalty - Appeal allowed.
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