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TMI BlogCenvat Credit on Input Services used in Trading Activity as well as in Taxable Service ActivityX X X X Extracts X X X X X X X X Extracts X X X X ..... Cenvat Credit on Input Services used in Trading Activity as well as in Taxable Service Activity X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Cenvat Credit Rules, 2004 which is reproduced as under: (e) "exempted services" means taxable services which are exempt from the whole of the service tax leviable thereon, and includes services on which no service tax is leviable under section 66 of the Finance Act; As understood generally that since trading activity is not a service, the same can not be treated as exempted services. Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sequently, some sections of the service providers feel that cenvat credit of service tax paid on Input services used in trading activity is eligible without any limitation. But, such contention is not acceptable since the availability of Cenvat Credit is the first stage and utilization of such credit is subsequent stage. As per Rule 3 of the CCR, cenvat credit is allowed on any input service rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived by the manufacturer of final product or by the provider of output services on or after the 10th day of September, 2004. Therefore, any input service which used in trading activity is not an eligible input service. This statement gets support from the decision of honorable CESTAT in the matter of METRO SHOES PVT. LTD. Versus COMMISSIONER OF CENTRAL EXCISE, MUMBAI-I [2008 -TMI - 4278 - CESTAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , MUMBAI] in which honorable tribunal has held that: "…….But as regards the service tax credit on amount of service tax taken by the appellant for the services which are directly and wholly attributable to the trading activities would not be eligible as credit, as the definition of the input services indicates that the credit is eligible only in "respect of manufacture" of the final product and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearance of the final product form the place of removal……."
But, cenvat credit on input services used by the Depots or warehouse which is considered as place of removal in case of Excisable Goods are eligible for Cenvat Credit. X X X X Extracts X X X X X X X X Extracts X X X X
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