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2018 (10) TMI 167 - AT - Service TaxCENVAT Credit - common input services used for providing the taxable output services as well as for trading activities undertaken by it - non-maintenance of separate records - sub-rule (3) of Rule 6 of the Cenvat Credit Rules, 2004 - Held that:- On perusal of both the pre-amended and post amended definition of exempted service contained in Rule 2(e), there is no much of difference between the definitions inasmuch as the explanation added to amended definition with effect from 31.03.2011 has only clarified that “exempted services includes trading”. In interpreting the provisions of both pre and post amended definition of exempted service, the Hon’ble Madras High Court in the case of Ruchika Global Interlinks v. CESTAT, Chennai [2017 (6) TMI 635 - MADRAS HIGH COURT] have held that inclusion of trading in the explanation appended to Rule 2(e) was only clarificatory - thus, the grounds urged by Revenue that the trading was not considered as an exempted service during the disputed period, will not hold good and accordingly, cannot alter the findings recorded in the impugned order. Since, the assessee had reversed the credit attributable to input services used for the trading activities. Since such reversal is not in conformity with sub-rule (3) of Rule 6 of the Cenvat Credit Rules, 2004, we are of the view that the learned Commissioner has correctly interpreted the statutory provisions and confirmed the adjudged demand, to which the respondent was not legally entitled for CENVAT benefit - Since trading is not at all a taxable service as per the definition under the Finance Act, 1994, there was no occasion for availment of credit for such trading activity. Since the appellant had availed irregular CENVAT Credit on the input services used for trading activity, the intention of the assessee is manifest in defrauding the Government Revenue. Credit cannot be allowed - appeal allowed - decided in favor of Revenue.
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