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2016 (9) TMI 1539 - Commissioner - Central ExciseCENVAT Credit - common input services used in excisable goods and providing exempted service i.e. trading - Rule 6(2) of CENVAT Credit Rules, 2004 - extended period of limitation - penalty. HELD THAT:- Since the trading activity is a exempted services even after 01-07-2012, therefore I find that in backdrop of the undisputed fact that the Noticee has neither maintained separate accounts as required under Rule 6(2) of CENVAT Credit Rules, 2004 nor have filed option under Rule 6(3A) ibid, I find that Noticee is required to pay an amount at the rates specified in Rule 6(3) ibid - Rule 6(3A) of CENVAT Credit Rules, 2004, inserted vide Notification No: 13/2016-Central Excise (NT) dated: 01-03-2016, is having effect from 01-04-2016 i.e it is having prospective effect. The dispute pertains to the period from 2011-2012 and 2012-2013 therefore the said Rule cannot be applied retrospectively. The Noticee are liable to pay an amount of ₹ 27,72,837/ -, as worked out in Show Cause Notice, under Rule 6(3) of CENVAT Credit Rules, 2004. The explanation III to Rule 6 ibid provides that the amount payable under Rule 6(3) ibid shall be recovered under provisions of Rule 14 ibid. Upon referring to Rule 14 of CENVAT Credit Rules, 2004 I find that it stipulates that it shall be recoverable under Section 11A of Central Excise Act, 1944 along with interest under Section 11AA ibid. Thus the question carved at Para 13 (i) is answered in affirmation. The fact of trading activity came to the knowledge of the department only during the course of audit. Prior to that Noticee has not intimated anything to the department Thus the Noticee has willfully suppressed the fact with an intention to evade the payment of amount under Rule 6(3) of CENVAT Credit Rules, 2004 and have availed and utilized ineligible CENVAT credit. Therefore, the extended period has been rightly invoked under Section 11A(5) of Central Excise Act, 1944. The Noticee are liable for penalty equal to 50% of the amount under Rule 15 of CENVAT Credit Rules, 2004 read with Section 11A(5) of Central Excise Rules, 2002 read with Section 11AC(1)(b) ibid. Thus, the point is answered in affirmation.
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