TMI Blog2018 (12) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... is attributable to the taxable services provided by him and not availing the CENVAT credit of the input services which are attributable to the trading activity. By availing only the CENVAT credit of the service tax paid attributable to the taxable services, in my view, appellant had complied with the provisions of Rule 6(2). The decision in the case of M/S. TRANS ASIAN SHIPPING SERVICES PVT LTD VERSUS THE COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX (VICE-VERSA) [2018 (9) TMI 922 - CESTAT BANGALORE], is directly applicable to the facts of present case, where it was held that the appellants have maintained separate records and as such, there is force in the arguments made by learned counsel for the appellant-assessee. Exte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act availed CENVAT credit of the common input services attributable to the taxable services and had not availed the CENVAT credit for the non taxable activity i.e. trading activity and explained the rationale as to that this has been done based upon the trading activity to the total turnover. Not satisfied with such an explanation, show cause notice was issued stating that the method adopted by appellant is incorrect and non-permissible and he should have reversed an amount s per provision of Rule 6(3A) of CCR 2004. Adjudicating authority, after following due process of law, confirmed the demands so raised along with interest and imposed penalties. The first appellate authority also disposed of the appeal upholding the view of the adjudicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dits this anomaly which is said to be pointed out, was indicated. 4. Ld. DR on the other hand submits that the provisions of Rule 6(2) is applicable for the period in question i.e. March 2012 to March 2015 indicates that appellant should maintain separate accounts for the goods and services used in relation to the provision of output services excluding exempted services. 5. On careful consideration of the submissions made by both sides, I find that there is no dispute as to the fact that appellant is eligible to avail CENVAT credit of various input services; has maintained separate accounts for the services which are received exclusively for exempted services; that they are undertaking trading activity for which common services were r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, then, the manufacturer or provider of output service shall maintain separate accounts for receipt, consumption and inventory of input and input service meant for use in the manufacture of dutiable final products or in providing output service and the quantity of input meant for use in the manufacture of exempted goods or services and take CENVAT credit only on that quantity of input or input service which is intended for use in the manufacture of dutiable goods or in providing output service on which service tax is payable. 7. It is seen from the above reproduced provisions that the intention of the Legislature was that a manufacturer or a service provider should not avail the entire CENVAT credit of the service tax paid on common ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the learned Commissioner, however, out of above five appeals, only in one case the Commissioner has caused a factual enquiry and has stopped the proceedings. It is not understood as to why such an enquiry was not conducted in respect of other show-cause ST/1252/2010; ST/1721/2011; ST/1700-3466/2012; ST/21676/2014 12 notices. Understandably, the appellants are a big entity spread over different countries and different places in India as there is no prescribed manner for maintenance of records under CENVAT Credit Rules, the records maintained by the appellants have to be accepted as records for the purpose of observing the conditions of CENVAT Credit Rules. Moreover, we find that the Chartered Accountant has given a categorical certi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e (2) of Rule 6. Once the conduct of the appellant in the manner indicated by the material facts stated above is very clear because of the proportionality of the credits allocated, due to its division of the department and maintenance of records, there cannot be any presumption by Revenue that the appellant's case falls under Rule 6 (3) of CCR 2004. It is also apparent from record that the order passed by the Authority below is unreasonable for the reason that as against credit of ₹ 6,66,423/- allocated to the department in Table- B which provided exempted service, disallowance of entire credit of Rs.1,11,07,075/- allocated to Departments in Table-A providing taxable service is contrary to the principal of proportionality. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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