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2017 (7) TMI 526 - CESTAT ALLAHABAD

2017 (7) TMI 526 - CESTAT ALLAHABAD - TMI - CENVAT credit - trading turnover - 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 - Held that: - the issue is no more .....

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e said Show Cause Notice did not make out a case for invocation of provisions of Rule 14 of Cenvat Credit Rules, 2004 - appeal allowed - decided in favor of appellant. - ST/51042/2014-CU[DB] - ST/A/70597/2017-CU[DB] - Dated:- 19-6-2017 - Mr. Anil Choudhary, Member (Judicial) And Mr. Anil G. Shakkarwar, Member (Technical) Shri Atul Gupta. Advocate, for Appellant Shri Rajeev Ranjan, Joint Commissioner (AR), for Respondent ORDER Per: Anil G. Shakkarwar The present appeal is directed against Order-i .....

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input service credit of service tax paid on input services. They were also engaged in trading of bought out goods. It came to the knowledge of Revenue that appellants were availing entire service tax paid on the input services without reversing any proportionate Cenvat credit amount with regard to the trading turn-over. It further appeared to Revenue that Cenvat credit of service tax paid on the services which were attributable to trading of goods were not admissible to the appellants under the .....

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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 to trading activity. It was further stated in the said show cause notice that in such situation the remedy lied in reversal of Cenvat credit in the ratio of turnover of trading goods of the total turnover on the strength of case law in the case of M/s Or .....

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of exempted services and that there were no provision for availing credit of service tax paid on input services which not used or utilized either or in relation to manufacture of excisable goods or for providing output service and that credit of service tax paid on input services used for trading activity was not allowed as the said trading activity could not be considered as an activity amounting to manufacture or provision of service. Therefore, total Cenvat credit availed during the relevant .....

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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 the .....

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l for appellant, who has submitted that the issue is no more res-integra and is squarely covered by this Tribunal's Final Order No.A/70166-70170/2017 dated 23.01.2017 in the case of M/s L. G. Electronics India Ltd. Vs Commissioner of Central Excise and Service Tax, Noida reported at 2017-TIOI-1316-TCESTAT-ALL. He further, submitted that this Tribunal had allowed appeal in similar circumstances, where facts of the case were similar and reliance for issue of show cause notice in both the cases .....

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id 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 pr .....

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the basis of turnover of manufacture and turnover of trading a ratio was calculated and total Cenvat credit of Service tax paid on input services was distributed in that ratio and the component attributable to trading was proposed for denial of Cenvat credit and recovery of Cenvat credit proposed under Rule 14 of Cenvat Credit Rules, 2004. During the relevant period said Rule 14 provided that whenever the Cenvat credit has been taken and utilized wrongly or has be erroneously refunded the same .....

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