9911796707
TMI Blog2018 (7) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices viz. Advertisement, Management, Maintenance & Repair, Courier, Authorised Service Station, Manpower supply agencies, clearing & forwarding, Banking & Financial etc. on the basis of invoices issued by their Input Service Distributors (ISD), which were not used in or in relation to the manufacture of their final dutiable goods. It was also revealed that the CENVAT credit has been passed on by their Head Office and Branch Offices as ISD and that the input services on which CENVAT credit availed, were commonly used in relation to their traded goods as well as manufactured goods. Based on the data submitted by the Appellant in respect of the credit taken on ISD invoices, total credit availed by the Appellant during a financial year was worked out and on the basis of ratio of turnover of tiles manufactured and that of tiles traded, excess credit being credit of input services on the traded goods worked out. The said calculation is as under:- Sr.No. Year Cenvat Credit taken on the basis of invoices issued by the ISD by the noticee Ratio % of tiles manufactured Ratio % of tiles imported /traded Inadmissible Cenvat Credit wrongly taken on the basis of invoices issued b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that the show cause notice dated 3.6.2014 has been issued for the period from April, 2011 to September, 2013 and since the entire demand is beyond the period of one year, the same is time barred and liable to be set aside. According to him extended period is not invokable since there was no suppression on the part of the Appellant and there was no intention on the part of the appellant to act dishonestly to evade payment of duty. He also submitted that trading activity cannot be considered as exempted service prior to the introduction of explanation, in Rule 2 of Cenvat Credit Rules, 2004, w.e.f. 1-3-2011. Since trading cannot be considered as exempted service for the period prior to that date, there is no need for the appellant to restrict or to reverse Cenvat credit attributable to such trading activity. He further submitted that all the facts were within the knowledge of the department from 4.9.2009 on the basis of CERA Audit, when certain information was sought from the appellant. It was also his contention that there were some internal correspondence between the department and Senior Audit officer and from those correspondence it is clear that in fact the department i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and includes services used in relation to modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage up to the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation up to the place of removal; but excludes services." The admitted facts are that the appellants availed Cenvat credit on input services and they had considerable turnover and income in trading activities. It is also admitted that the services on which credit have been availed are partly relatable to trading activities also. The appellants contested the reversal of credit, to a proportionate extent, on the ground that trading is not an exempted service prior to the insertion of explanation w.e.f. 1.4.2011. But he has failed to consider that trading is not a taxable service also. In other words, trading is an activity which is not cover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rule 14 of CCR, 2004, the department has already filed Appeal before the Hon'ble High Court of Judicature at Allahabad being Central Excise Appeal No. 250 of 2017 and the Hon'ble Division Bench of the High Court vide order dated 6.9.2017 admitted the Appeal and the matter is pending before the Hon'ble High Court. Therefore, I upheld the order of the ld. Commissioner (Appeals) on this point also. 6. On the question of extended period of limitation, it is clear that the trading is not an activity or a service covered by the Cenvat scheme prior to the introduction of clarificatory explanation. The appellants have no reason to avail credit on services which they are fully aware were being used for trading activity also. There is no question about the bona fide belief of the appellant contrary to the provisions of law. There is no ground for such belief. Trading activity not being covered by the credit scheme itself during the material period, the appellants having availed the credit on such input services cannot contest the demand on limitation. Filing of ER-1 return giving therein Cenvat Credit figure does not mean that the department had knowledge about distribution and availment ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
