TMI Blog2015 (10) TMI 979X X X X Extracts X X X X X X X X Extracts X X X X ..... correct. At the same time, credit cannot be allowed against trading as it is not either a service falling under Finance Act 1994, manufacture under the Central Excise Act, 1944. Therefore that portion of the input service availed for trading is not admissible. - Decision made in the case of Orion Appliances Ltd. Vs. Commissioner of Service Tax, Ahmedabad [2010 (5) TMI 85 - CESTAT, AHMEDABAD] followed. Extended period of limitation - the issue reveals an interpretational issue - appellant was under the belief that trading not being a service at all there is no requirement to maintain separate accounts. - There is no suppression or wilful misstatement with intention to evade payment of duty thus extended period is not invokable – Decid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of penalty after invoking the extended period of limitation. In appeal, the same was upheld. Aggrieved the appellant is now before the Tribunal. 3. According to the department, the mobile phones are used by sales representatives for sales promotion of vehicles, i.e., mainly for sale of vehicles. The activities of insurance, financing and repair/maintenance of vehicles are only incidental to the main activity. The main activity of the appellant being trading and the input service (mobile phone) having been used as common input services for both trading and output services of financing, insurance and authorized service station, per Rule 6(2) of the Cenvat Credit Rules, 2004, the appellant ought to have maintained separate accounts and woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed counsel for appellant is correct in submitting that trading has been categorized as an exempted service only w.e.f. 1.4.2011. Trading activity not being a service at all, the appellant is not required to maintain separate accounts as per sub rule (2) of Rule 6 prior to 1.4.2011. So the view of department that the appellant is not entitled to credit for want of maintaining separate account is not correct. At the same time, credit cannot be allowed against trading as it is not either a service falling under Finance Act 1994, manufacture under the Central Excise Act, 1944. Therefore that portion of the input service availed for trading is not admissible. The question is how to arrive at that portion of the input service availed for trad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted and the balance only availed for the purpose of payment of service tax of output service. This proposition is not against the law in view of the fact that there are several decisions of various High Courts and also of the Tribunal wherein a view has been taken that subsequent reversal of credit amounts to non-availment of credit. I am conscious of the fact that the decision or the conclusion reached by me above is not what was proposed in the show cause notice or what was desired by the appellants. But here I find that the procedure adopted by the department is also not correct and at the same time as per law assessee is not eligible for service tax paid on input services attributable to trading activity. Obviously, the only solut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod is not invokable. It is submitted that appellants believed that there was no irregularity in availing the credit as the fact of availing credit was being communicated to the department as per S.T.-3 returns. The fact that appellants were registered for trading activities also was within the knowledge of department. Further that an audit was conducted earlier in December 2005, but no objection regarding credit on mobile phones was found then. Against this, on behalf of the department it was strongly argued that there is suppression of facts, as the evasion would have gone undetected, if the audit party had not verified the records. 8. To invoke the extended period, there should be suppression or willful misstatement with intention t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
