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2017 (7) TMI 526

..... 004 were applicable only when the output service provider is engaged in both providing output service chargeable to service tax as well as exempted services and that trading activity was neither manufacture nor taxable service - Held that: - the issue is no more res-integra and is squarely covered by this Tribunal's decision in the case of M/s L. G. Electronics India Ltd. Vs Commissioner of Central Excise and Service Tax, Noida [2017 (3) TMI 1355 - CESTAT ALLAHABAD], where it was held that there is no allegation in the said Cause Notice that the appellants had taken credit of any inadmissible Cenvat credit. Further the Show Cause Notice dated 09/05/2011 states that Rule 6 of Cenvat Credit Rules, 2004 is not applicable in the present case. T .....

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..... the provisions of Cenvat Credit Rules, 2004. Therefore, the appellants were issued with a show cause notice dated 26.09.2012 for the period from 2007-08 to 2009-10. It was stated in the said show cause notice that common input services were used for providing output services as well as for trading of the goods. It appeared to revenue that Rule 6 of Cenvat Credit Rules, 2004 were applicable only when the output service provider is engaged in both providing output service chargeable to service tax as well as exempted services and that trading activity was neither manufacture nor taxable service and further that Cenvat credit of service tax paid on services attributable to trading was void ab-initio and there was no application of said Rule 6 .....

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..... Cenvat credit in the said proportion for trading activity was sought to be disallowed and recovered under Rule 14 of Cenvat Credit Rules, 2004 read with Section 73 of the Finance Act, 1994. Through the said show cause notice appellant was called upon to show cause as to why Cenvat credit of ₹ 1,17,79,338/- allegedly/wrongly availed on input services during the period from 2007-08 to 2009-10, attributable to trading activity should not be disallowed and recovered with interest under Rule 14 of Cenvat Credit Rules, 2004 read with Section 73 of the Finance Act, 1994. It, further, proposed to appropriate Cenvat credit of ₹ 1,17,79,338/-deposited by appellant. There was a proposal to impose penalty under Rule 15 of the said rules on .....

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..... s said Final Order dated 23.01.2017. 5. Having considered the submissions of both sides and on perusal of records and on perusal of said 14 Final Order dated 23.01.2017, we find that the said Final Order of this Tribunal dated 23.01.2017 squarely covers the issue involved in the present appeal. For the sake of convenience the finding in the said Final Order dated 23.01.2017 as per para-6 is reproduced below:- "6. Having considered the al contentions and on perusal of record, find that in the present case, M/s L. G. Electronics India Pvt. Ltd. was manufacturing the goods and also trading the goods on being imported and being procured from other manufacturers. They were taking Cenvat credit on service tax paid on input service as stated .....

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..... rder to invoke provisions of said Rule 14 it is to be first established that either the Cenvat credit was not admissible or Rule 6 was applicable in the transaction then only Cenvat credit could be recovered under Rule 14 of Cenvat Credit Rules, 2004. In the present case, admittedly, there is no allegation in the said Cause Notice that the appellants had taken credit of any inadmissible Cenvat credit. Further the Show Cause Notice dated 09/05/2011 states that Rule 6 of Cenvat Credit Rules, 2004 is not applicable in the present case. Therefore, the said Show Cause Notice did not make out a case for invocation of provisions of Rule 14 of Cenvat Credit Rules, 2004. Therefore, Show Cause Notice was not sustainable for the reasons that the conte .....

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