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Delcam Software India Pvt Ltd Versus Commissioner of Central Excise, Pune -I

2016 (3) TMI 809 - CESTAT MUMBAI

Availment of Cenvat credit - Tax paid on services used in common for ‘output services' and trading - Held that:- in view of the decision of Tribunal in the case of Mercedes Benz India Pvt Ltd v Commissioner of Central Excise Pune - I [2014 (4) TMI 12 - CESTAT MUMBAI], the credit that may be availed of the tax paid on services used in common for ‘output services' and trading during the relevant period is to be so apportioned and appropriate reversals effected. Therefore, as the turnover has been .....

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of Central Excise (Appeals), Pune I, is before the Tribunal seeking the quashing of the impugned order. The first appellate authority had modified the order of the Assistant Commissioner of Central Excise, Service Tax Cell, Pune I, by reducing the tax liability to ₹ 2,34,788/- with interest thereon after granting benefit of Rule 6(5) of CENVAT Credit Rules, 2004 to the extent of ₹ 1,10,005/- and setting aside the penalty imposed under Rule 15(3) read with section 78 of Finance Act, .....

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ules, 2004. 3. The appellant had, at all the preceding stages, questioned the propriety of denial of the disputed CENVAT Credit claiming that trading' is not covered by the definition of exempted goods or exempted service' and hence the restrictive provision relating to availment of credit was not applicable to them. The computation of the ineligible credit was also challenged along with the rejection of reversal of CENVAT Credit as appropriate payment of the amount held as due. 4. The a .....

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xcise, Jaipur [2009 (13) STR 419 (Tri-Del)] and Orion Appliances Ltd v Commissioner of Service Tax, Ahmedabad [2010 (19) STR 205 (Tri-Ahd)] respectively. 5. The dispute here is about whether trading' is an exempted service'. However, that dispute has arisen in the context of services used by the appellant for rendering output service' as well as exempted service'. Both sides are in agreement that trading' is not an output service. Therefore, the implication of the context is .....

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' was claimed to be prospective and also impliedly indicative of legislative intent to keep trading out of the definition of service till then. 7. Admittedly, the appellant is in the business of providing different services in addition to trading in packaged software . It is pointed out by the appellant, the activity of trading has been deemed as an exempted service' by incorporation in Rule 2(e) of CENVAT Credit Rules, 2004 vide an Explanation with effect from 1 st April 2011. According .....

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l in Mahindra & Mahindra Ltd. v. Commissioner of Central Excise, Mumbai [2007(211) ELT 481 (Tri-Mumbai)] to contend that, as held in relation to insertion of Explanation III (as it then was) to Rule 6(3) of CENVAT Credit Rules, 2004 for denial of credit of duty/tax paid on inputs/input services used exclusively for manufacture of exempt goods/providing of exempt services, the date of effect of the amendment in the amending notification precluded it from having retrospective effect. Reliance .....

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65 of Finance Act, 1994. Others deal with the retrospective application of amendments in subordinate legislation that do not appear to have been contemplated in the main legislation; in particular, the retrospective application of insertions through Explanations in Rules or notifications. 10. The decision of the Tribunal in re Mercedes Benz India Pvt Ltd is in almost identical circumstances and has examined most of the cited decisions before arriving at the findings therein. In the said matter, .....

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