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2018 (8) TMI 548 - AT - Central ExciseCENVAT Credit - common input services for “trading goods’ as well as for manufactured taxable goods - whether the appellant are entitled for Cenvat credit of common input services used for trading of the goods or not? Held that:- The matter is no longer res-integra as it has already been decided in the case of M/s Mercedes Benz India Pvt. Ltd. vs. CCE, Pune – I [2014 (4) TMI 12 - CESTAT MUMBAI] that the assessee is not entitled to input service Cenvat credit on the exempted goods which also cover trading activity. Amendment to Rule 2 (e) of the Cenvat Credit Rules, 2004 vide Notification No. 3/2011-CE (NT) dated 01/03/2011 has been inserted w.e.f. 01/03/2011 - 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. Whether the appellant need to reverse back the Cenvat credit @ 6% of the value of traded goods or the proportionate of Cenvat credit as availed by them towards trading of the goods? - Held that:- Tribunal in its various decisions has held that it has never been intention of the legislature to recover from the assessee what is actually attributed to have been used for providing exempted service. In another case of the assessee - reliance placed in the case of M/S. MERCEDES BENZ INDIA (P) LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-I [2015 (8) TMI 24 - CESTAT MUMBAI] - thus, the appellant is not entitled for taking Cenvat credit on common input services going for trading of goods. Penalty u/s 11AC of Central Excise Act, 1944 - Held that:- Since the position of the CENVAT credits attributable towards the trading of goods have already been reversed by the appellant voluntarily before issue of show cause notice, there is no justification in imposing penalty under section 11AC of Central Excise Act, 1944 on the appellant. Matter remanded back for denovo adjudication to the Original Adjudicating Authority to see whether the party’s claim of reversal of common input service credit is correct or not and to decide the same
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