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2014 (12) TMI 455 - CESTAT BANGALOREReversal of cenvat credit towards trading activity - Rule 6 (3) of CENVAT Credit Rules 2004 - Held that:- Appellant was liable to reverse proportionate credit on the total trading turnover which has been worked out by the appellant as ₹ 31,89,728/- in our opinion has also to be deposited. Since amendments in the relevant rules and provisions were brought in 2011 to deem trading as a service and separate exemption notification was issued making it an exempted service. Prior to that, if a service was non-taxable or exempt, it was to be considered as an exempted service and if common services were used for exempted services and taxable services/dutiable manufactured items, separate accounts were required to be maintained in respect of inputs and input services failing which there were statutory requirements to be fulfilled. Once we hold that trading is not a service and cannot be considered as service prior to 01.04.2011, the provisions of Rule 6(3) of CCR 2004 which requires payment of a percentage of value of the goods traded, in case separate accounts are not maintained would not be applicable. However, since trading is an activity and certain amount of services would have been used in such activity, the appellants have to reverse proportionate credit attributable to trading activity. Appellant was liable to reverse proportionate credit on the total trading turnover which has been worked out by the appellant as ₹ 31,89,728/- in our opinion has also to be deposited - Partial stay granted.
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