TMI Blog2018 (5) TMI 1419X X X X Extracts X X X X X X X X Extracts X X X X ..... ere aware that Cenvat credit of input services can only be availed on the taxable output service and as the “Trading Activity” was not even a taxable activity they could have resisted from availing Cenvat credit of common service inputs - benefit of section 80 not allowed - penalty upheld. Appeal dismissed - decided against appellant. - Service Tax Appeal No. 52609 of 2014 - Final Order No. 51957/2018 - Dated:- 22-5-2018 - Hon ble Shri S.K. Mohanty, Member (Judicial) And Hon ble Shri C.L. Mahar, Member (Technical) Shri Sandeep Mukherjee, C.A. for the appellant Shri A.K. Singh, Authorized Representative (DR) for the respondent ORDER Per. C. L. Mahar The brief facts of the matter are that the appellant is provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd quantity of input services meant for use in providing exempted or non-taxable activity and take Cenvat credit only on that quantity of input services which was intended for use in providing output services on which service tax is payable and which the appellant has failed to maintain. 3. In the eventuality that where such separate account of use of input services is not maintained the party is required to pay amount equal to 6% of value of exempted services (during the period 01/04/2008 to 06/07/2009 the amount payable was 8% of value of exempted service or non-taxable service) or pay an amount equal to proportionate Cenvat credit attributable to exempted output services in terms of the provisions of sub-Rule 6 (3) (i) and (ii) of Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clause (c) of Explanation I appended after Rule 6(3D) of Cenvat Credit Rules, 2004. The said provision as noted earlier was inserted with effect from 1-4-2011. The argument of the ld. Sr. Advocate is that the said explanation only provides the procedure for computation and since this change is procedural in nature it will have a retrospective effect. Ld. Sr. Advocate also argued that in case of traded goods, the value addition by the appellant is only the difference between the sale price and the purchase price of the goods which is not so in the case of manufactured goods. On a query by the Bench that since ld. Sr. Advocate is arguing that only the value addition should be taken in respect of the traded goods, then why the same criteria sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turnover for purpose of charging a tax as there is no tax liability in case of traded goods. The question is how to apportion the credit of tax on the input service between the manufactured goods and the traded goods, whether we should take the turner of the manufactured goods and traded goods for apportioning the credit of the service tax on input services or some other criteria should be followed. We, therefore, do not find any applicability whatsoever of the said judgment in the facts and circumstances of the present case. Another judgment quoted by the ld. Sr. Advocate is the judgment of the Hon ble Supreme Court in the case of Commissioner of Wealth Tax, Meerut v. Sharvan Kumar Swarup Sons reported in (1994) 6 SCC 623. In this case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it attributable to the trading activity as has rightly been held under the order-in-original/appeal and accordingly we are inclined not to interfere with order-in-appeal so far as demand/reversal of Cenvat credit on input services for trading goods is concerned. 8. The appellant has also pleaded that penalty under Section 78 of Finance Act, 1994 is not imposable on them as firstly; the department was fully aware of the fact that Cenvat credit on common service inputs is being availed by them since they were regularly filing their service tax returns with the department. Secondly, it has also been contended that, the law was not very clear on the issue and on this ground they should have been given the benefit of Section 80 of the Finan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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