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2016 (6) TMI 230 - CESTAT HYDERABADIrregularly availing credit on trading activity - how to arrive at the quantum used for trading when no separate accounts are maintained - Held that:- The Commissioner(Appeals) has directed the lower authority to recompute the CENVAT credit as trading became exempted service only after 01/04/2011. Prior to 01/04/2011 the only method of computation available was the method in case of exempted services and original authority adopted such method. The computation method taken by the appellant to arrive at the figure ₹ 2,74,122/- is the method for computing in case of trading w.e.f. 01/04/2011. As this is the formula/method provided by legislature for computing value in case of common inputs/input services used for trading activities when there is no separate accounts, the view that application of this method to arrive at the value would be more appropriate though it was introduced w.e.f. 01/04/2011 only. Therefore, direct the jurisdictional Superintendent to compute the value/amount of credit of common input services attributable to trading activity falling within the normal period as per the method provided in Rule 6(3D)(c) of CENVAT Credit Rules as applicable to trading. Thus hold that the appellant is liable to reverse such amount and interest thereon. The original authority has imposed equal amount of penalty. In the present case, as there is no suppression of facts or willful misstatement, the imposition of penalty is totally unjustified. Therefore the appellant is liable to pay the recomputed amount of credit attributable to trading along with interest only. The imposition of penalty is set aside.
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