TMI Blog2017 (11) TMI 606X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices which are used commonly for manufacture of dutiable goods and trading (exempted service). They are not maintaining separate accounts. The first contention of the appellant is that Rule 6 provides for the procedure to avail credit when common inputs/input services are used and therefore this entire Rule i.e., Rule 6, has to be interpreted so as to pertain to areas where common credit is availed. I am not able to agree with this argument of the Ld.Counsel for appellant. The Rule provides for obligation of manufacturer of dutiable and exempted goods and provider of taxable and exempted services. Therefore a manufacturer who manufactures both dutiable goods and exempted goods and provider who provides taxable and exempted service woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing common input services for manufacturing activity as well as trading activity and did not maintain separate accounts. Trading being an exempted service with effect from 1.4.2011, the input services commonly used for manufacture of dutiable and trading activity is not fully eligible and the appellant has to reverse credit applying the formula laid in Rule 6 (3A)(c). According to department, appellant though ought to reverse ₹ 6,25,072/- had reversed only lesser amount. Show Cause Notice was issued proposing to recover the differential amount of ₹ 4,95,973/- alongwith interest and also for imposing penalty. After due process of law, the original authority confirmed the demand and imposed penalty of ₹ 49,597/-. In appeal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng calculation : Value of Trading Turnover __________________________________x Cenvat credit taken on common input services Total Turnover (Manufacture + Trading) 3. The department was of the view that in the formula, the total credit availed on input services has to be applied and not the total 'common' credit on input services. Thus Show Cause Notice for the periods 4/2013 to 3/2014 and 4/2014 to 3/2015 were issued proposing to recover the differential amount alongwith interest and also proposing to impose penalties. After due process of law, the original authority confirmed the demand of ₹ 40,22,773/- (Rs.12,07,125/- + ₹ 28,15,648/- for the two different periods) alongwith interest and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit. 5. Against this, the Ld.AR, Shri A.Cletusand Shri K.P.Muralidharan reiterated the findings in the impugned order. It was submitted that as per the said Rule, P denotes total cenvat credit. Nothing can be read into the law. There is no ambiguity and therefore the contention of appellant cannot be accepted. 6. Heard both sides. 7. For better appreciation Rule 6 is reproduced as under : Rule 6. Obligation of manufacturer of dutiable and exempted goods and provider of taxable and exempted services.- (1) The CENVAT credit shall not be allowed on such quantity of input or input service which is used in the manufacture of exempted goods or for provision of exempted services, except in the circumstances mentioned in sub-ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pay an amount equal to five per cent of value of the exempted goods and the provider of output service shall pay an amount equal to six percent of value of the exempted services; or (ii) the manufacturer of goods or the provider of output service shall pay an amount equivalent to the CENVAT credit attributable to inputs and input services used in, or in relation to, the manufacture of exempted goods or for provision of exempted services subject to the conditions and procedure specified in sub-rule (3A). Explanation I . If the manufacturer of goods or the provider of output service, avails any of the option under this sub-rule, he shall exercise such option for all exempted goods manufactured by him or as the case may be, all ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the manufacture of exempted goods or exempted services. The appellant is manufacturing dutiable goods and is also engaged in trading. Trading is deemed to be an exempted service as per the explanation introduced with effect from 1.4.2011 to the definition of 'exempted service'. The appellant is using input services exclusively for dutiable goods and are availing entire credit on such input services. They are also availing certain other input services which are used commonly for manufacture of dutiable goods and trading (exempted service). They are not maintaining separate accounts. The first contention of the appellant is that Rule 6 provides for the procedure to avail credit when common inputs/input services are used and therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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