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2018 (3) TMI 273

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..... d service but also for taxable service. This issue has been considered in detailed by this Tribunal in the case of Mercedece Benz India Pvt. Ltd. Vs. CCE, Pune [2015 (8) TMI 24 - CESTAT MUMBAI], where it was held that Rule 6 of the Cenvat Credit Rules is not enacted to extract illegal amount from the assessee. The main objective of the Rule 6 is to ensure that the assessee should not avail the Cenvat Credit in respect of input or input services which are used in or in relation to the manufacture of the exempted goods or for exempted services. The option was available to the assessee to reverse the proportionate credit under Rule 6(3) (ii) in terms of Rule 6(3A) of Cenvat Credit Rules, 2004. Accordingly, the demand of 8%/6% in terms of Rule 6(3) (i) cannot be sustained. As regard the cenvat credit retained by the appellant in respect of input service which are specified under Rule 6(5) of Cenvat Credit Rules, 2004, the said rule provides that there is no reversal is required even though the part of the service was used for exempted service. Appeal allowed - decided in favor of appellant. - Appeal No. ST/89632/13 - - - Dated:- 26-2-2018 - Shri Ramesh Nair, Member ( Ju .....

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..... e sustained. He submits that in the identical facts demand of 8%/6% in terms Rule 6(3) of Cenvat Credit Rules, 2004, set aside in various judgements. He placed reliance on the following judgments: (i) Commissioner of C.Ex., Bangalore-III Vs. Himalaya Drug Company 2012 (27) STR 95 (Kar. (ii) Commissioner of Central Excise Vs. Nicholas Piramal Ltd. 2017 (349) ELT 33 (Bom.) (iii) Sahyadri Strach Industrial Pvt. Ltd. Vs. Commissioner of Central Excise, Kolhapur 2016-TIOL-615-CESTAT-MUM (iv) Mercedes Benz India (P) Ltd. Vs. Commissioner of C. Ex., Pune-I 2015 (40) STR 381 (Tri.-Mumbai) (v) Bhingar Urban Co.op. Bank Ltd. Vs. C.C.E. Cus. S.T., Aurangabad 2016 (41) STR 673 (Tri.-Mumbai) (vi) M/s. Dwarkadas Mantri Nagar Sahakari Bank Ltd. Vs. Commissioner of Central Excise Customs, Aurangabad. 2016-TIOL-702-CESTAT-MUM (vii) Jost s Engineering Co. Ltd./Jaiprakash Chaurasia Vs. Commissioner of Central Excise, Mumbai-III 2013-TIOL-CESTAT-MUM (viii) Commissioner of C.Ex., Goa Vs. V.M. Salgaonkar Bros. Pvt. Ltd. 2008 (10) STR 609 (Tribunal-Mumbai) (ix) Tidel Park Ltd. Vs. Commissioner of Service Tax, Chennai 2010 (18) STR 642 (Tri.-Chennai). .....

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..... for the option as provided under Rule 6(3)(ii) of the Cenvat Credit Rules, 2012, in accordance to which, the appellant are supposed to an amount equivalent to Cenvat Credit on input service attributed to the exempted service in terms of Rue 6(3A). In the present case, the appellant has availed Cenvat Credit in respect of common input services, which has been used in relation to the manufacture of the final product as well as for trading of bought out cars. Therefore they are supposed to pay an amount equivalent to Cenvat Credit which is attributed to the input service used for exempted service i.e. sale of car. In our view, three options have been provided under rule 6(3) and it is up to the assessee that which option has to be availed. Revenue could not insist the appellant to avail a particular option. In the present case the appellant have admittedly availed option as provided under Rule 6(3)(ii) and paid an amount as required under sub rule (3A) of Rule 6. As regard the compliance of the procedure and conditions as laid down for availing option as provided under sub rule (3)(ii), we find that foremost condition is that the appellant is required to pay an amount as per the formu .....

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..... option, we are of the view that though there is no such time limit provided for exercising such option in the rules but it is a common sense that intention of any option should expressed before exercising the option, however the delay can be taken as procedural lapse. We also note that trading of goods was considered as exempted service from 2011only, thus it was initial period. We are also of the view that there is no condition provided in the rule that if a particular option, out of three options are not opted, then only option of payment of 5% provided under Rule 6(3)(i) shall be compulsorily made applicable, therefore we are of the view that Revenue could not insist the appellant to avail a particular option. In the present case admittedly it is appellant who have on their own opted for option provided under Rule 6(3)(ii). The meaning of the option as argued by the Ld. Sr. Counsel is that option of right of choosing, something that may be or is chosen, choice, the act of choosing . From the said meaning of the term option , it is clear that it is the appellant who have liberty to decide which option to be exercised and not the Revenue to decide the same. 5.4. We find that .....

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