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2019 (11) TMI 677 - AT - Service TaxCENVAT Credit - common input services utilised for taxable as well as exempt activity - reversal of proportionate credit - non-maintence of separate records - common input service tax credit availed by them in respect of Telephone and Renting of Immovable Property Service, since the consumables sold by the appellant while rendering service was alleged to be a trading activity - Rule 6 (3) of the CENVAT Credit Rules, 2004 - C.B.E.C. Circular No. 699/15/2003-CX - extended period of limitation. HELD THAT:- The C.B.E.C. Circular No. 699/15/2003-CX has clarified the issue regarding Service Tax on Authorized Service Station during the course of providing service, wherein such ASS replaces engine oil, gear oil, coolants, etc., as per the request of the customer that the sale of consumable during the course of providing service is akin to sale of parts and accessories and therefore value of such consumables is not includible in the value of taxable services, provided value of such consumables is shown separately - however, The law underwent a change with effect from 20.06.2012 with the inclusion of ‘exempted service’ under Rule 2 (e) of the CENVAT Credit Rules, 2004, which under its ambit covered trading of goods. The above Circular dated 05.03.2003 is therefore issued much earlier, obviously without having the benefit of the subsequent development. The issue on hand is squarely covered by the dictum of the Hon’ble High Court in M/s. Lally Automobiles Pvt. Ltd. [ 2018 (7) TMI 1679 - DELHI HIGH COURT ] where it was held that . - there are no merit in the appellant’s claim - appeal dismissed on this ground. Extended period of limitation - HELD THAT:- It is a fact borne on record that the appellant itself has chosen to follow the procedure laid down under Rule 6 (3A) on and from 01.04.2014 by reversing the proportionate input service credit attributable to the exempted service of trading, which clearly shows the knowledge of the appellant as to the requirement of law, which was also done prior to the issuance of the Show Cause Notice - extended period rightly invoked. Appeal dismissed - decided against appellant.
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