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2018 (7) TMI 339 - AT - Service TaxCENVAT Credit - common input services used in taxable as well as exempted services - non-maintenance of separate records on input service - Rule 6 (2) of the Cenvat Credit Rules, 2004 - Held that:- The law remains settled in this regard wherein it has been held in various pronouncement of this Tribunal that the Cenvat credit on input services going into the trading of goods is not available as per the provisions of Cenvat Credit Rules, 2004. Insertion of trading activity under Rule 2 (e) of the Cenvat Credit Rules, 2004 w.e.f. 01/03/2011 by Notification No. 3/2001 – CE (NT) dated 01/03/2011 - demand period pertains to April 2008 to December 2012 - retrospective or prospective effect of amendment - Held that:- The retrospective applicability of the explanation, which has been inserted under Rule 2 (e) of the Cenvat Credit Rules, 2004 becomes applicable retrospectively as same is being considered as an explanation to the already existing provisions. The Cenvat credit on the common input services going into both taxable services as well as exempted services will not be available so far as trading of goods are concerned - denial of credit justified. Another contention of appellant is that the total amount of Cenvat credit taken on common input services from April 2008 to December 2012 comes to an amount of ₹ 6,45,782/- only while a demand has been raised for an amount of ₹ 2,96,86,162/- - Held that:- The statute does not have any intention under Rule 6 (3) of the Cenvat Credit Rules, 2004 of earning any profit out of wrongly availed credit by an assessee - as per the existing law the Department is right in recovering back the input service credits which are only attributable to the exempted services including ‘trading activity’. Since, the amount of such common input credit is already available, the Department should recover back the input service credits which have gone only into exempted services. Since the above-mentioned amount of ₹ 6,45,782/- is attributable to both exempted as well as taxable services, therefore, this order-in-original is remanded back to re-adjudicate the matter only with regard to the apportionment of above- mentioned common input service credit between exempted and taxable service and confirm the amount which have gone into use of exempted services. Penalty u/s 78 - Held that:- Since the ingredients such as fraud, collusion, suppression of facts etc. are not present in the matter as all the facts were known to the Department and its Range office, the penalty is not imposable under Section 78 of the Finance Act, 1994. Decided against assessee - matter remanded for the purpose of re-quantification of demand.
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