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2020 (1) TMI 898 - AT - Service TaxCENVAT Credit - exempt services - agency commission - trading activity - Services covered by Rule 6(5) of CCR, 2004 - services rendered in Jammu & Kashmir - recovery u/r 14 of the Cenvat Credit Rules, 2004 read with Rule 6(3A) of the Cenvat Credit Rules, 2004 and Section 73(1) of the Finance Act, 1994. CENVAT Credit on agency commission - HELD THAT:- In respect of the same appellant for a different period it has been held by this Bench that they are not entitled to cenvat credit on the agency commission because the commissions has been paid for procuring orders and not in relation to rendering the service - the appellant is not entitled to cenvat credit on the agency commission paid for procuring order either for selling the goods or for procuring orders for AMC. Trading activity being an exempted service only post 01.04.2011 - HELD THAT:- T his issue has been settled by the Hon’ble High Court of Madras in the case of M/S. RUCHIKA GLOBAL INTERLINKS VERSUS THE CUSTOMS EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, SOUTH REGIONAL BENCH CHENNAI AND THE COMMISSIONER OF SERVICE TAX, CHENNAI [2017 (6) TMI 635 - MADRAS HIGH COURT] and M/S. FL SMIDTH PVT. LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE [2014 (12) TMI 699 - MADRAS HIGH COURT] that either before 01.04.2011 or after this state trading activity is an exempted service. The amendment made with effect from 01.04.2011 specifying trading activity as an exempted service will not make a difference - Credit cannot be allowed. Services covered by Rule 6(5) of CCR, 2004 - HELD THAT:- These are eligible for cenvat credit notwithstanding Rule 6(1) and Rule 6(2) of the CCR, 2004 as the rule position stood during the relevant period. If any of the services in question were covered by Rule 6(5), theappellant is entitled to the full amount of cenvat credit even if the services were partly used for rendering exempted services also - this is also a matter which is fit to be remanded to the original authority for verification - matter on remand. Services rendered in Jammu & Kashmir - HELD THAT:- The relevant period in this case is prior to 1-4-2011 when the definition of ‘exempted service’ under Rule 2(e) of CENVAT Credit Rules, 2004 included any service on which no service tax could be levied under the provisions of Chapter V of the Finance Act, 1994. Since no service tax could be levied on any service rendered in Jammu and Kashmir under this Act, it squarely falls under the definition of ‘exempted service’. When there is a statutory definition which is clear and unambiguous, it must be applied regardless of the consequences - the services rendered by the appellant in J&K are exempted services and must be treated as such while computing the ineligible/reversible CENVAT credit under Rule 6 (3) of CCR, 2004. The appeal is disposed of by way of remand to the original authority with a direction to re-determine the amount of cenvat credit to be reversed, interest and imposition of penalty if any, after following principles of natural justice.
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