TMI Blog2019 (2) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... ading) so as to fall within the ambit of Rule 2(e) of the CENVAT Credit Rules, 2004 - There is no evidence to show that common input services have been used for such High Sea Sales. Further, possibly to buy peace with the Department, the appellant had reversed the CENVAT Credit voluntarily and is now contesting only the rejection of refund claim. Refund was rejected mainly on the grounds that the appellant did not exercise the option of reversing the proportionate Credit and that another SCN has already been issued to the appellant demanding the recovery of Credit as quantified under Rule 6(3)(i) of the CCR, 2004 for the very same disputed periods - Held that:- The appellant, as per the provision, reversed an excess amount of ₹ 8,3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sale transactions are carried out with the buyer on High Sea Sale basis. 2.2 According to the Department, the said activity of High Sea Sale is a trading activity and is covered under the scope of exempted service under Rule 2(e) of the CENVAT Credit Rules (CCR), 2004. Since the appellant had not maintained separate accounts for the manufacture of dutiable products and trading activity (exempted services), they were intimated to follow Rule 6 of CCR, 2004. The appellant voluntarily calculated the amount as per Rule 6(3A)(c) of CCR, 2004 and reversed Credit of ₹ 6,21,222/- for the period 2011-12 and ₹ 5,04,316/- being the amount for the year 2012-13. They intimated the same to the Department on 28.06.2013. Subsequently, they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt attributable to trading (exempted service) that has to be reversed, as per Rule 6(3A)(c), they had erroneously taken the value of entire sales instead of adopting the difference between the cost value and the sale value of the goods sold. They had thus reversed ₹ 11,25,538/- instead of reversing only ₹ 2,86,785/-. 3.3 He submitted that the Original Authority has rejected the refund claim stating that the appellant has not exercised the option prescribed under Sub-rule (3) of Rule 6(3A) of CCR, 2004; that therefore appellant has to pay an amount at the rate of 6% of the value of the traded goods. Another reason for rejecting the refund claim is that a Show Cause Notice No. 11/2016 dated 24.02.2016 which was subsequently iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been exercised, the appellant ought to have paid an amount at the rate of 6% of the value of traded goods as provided in Rule 6(3)(i) of CCR, 2004. The appellant s reversal on pro rata basis cannot be accepted. 4.2 Further, a Show Cause Notice dated 24.02.2016 has been issued demanding the amount quantified under Rule 6(3)(i) of the CCR, 2004 for the said periods. Therefore, during the pendency of adjudication of such Show Cause Notice, the claim of the appellant that they are eligible for the refund cannot sustain. The authorities below have rightly rejected the refund. 5. Heard both sides. 6. The appellant is aggrieved by the rejection of refund claim. The allegation of the Department is that the appellant is engaged in manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... availed CENVAT Credit on any common inputs or input services in relation to such High Sea Sales transactions. In spite of that, the audit has raised objection that their activity of High Sea Sales is a trading activity falling under the scope of exempted service as defined under Rule 2(e) of the CCR, 2004 and that therefore, they have to follow the procedures contained in Rule 6(3) of CCR, 2004. There is no evidence to show that common input services have been used for such High Sea Sales. Further, possibly to buy peace with the Department, the appellant had reversed the CENVAT Credit voluntarily and is now contesting only the rejection of refund claim. I therefore confine the discussions in this order as to the reasons for rejection of ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecisions, which are as under : C.C., Puducherry Vs. CESTAT, Chennai 2015 (323) E.L.T. 323 (Mad.); Cranes Structural Engineers Vs. C.C.E., Bangalore-I 2017 (347) E.L.T. 112 (Tri. Bang.); and Star Coolers Condensers (P) Ltd. Vs. C.C.E., Nasik 2017 (352) E.L.T. 77 (Tri. Mum.). 9.2 The second ground for rejection is that a further Show Cause Notice dated 24.02.2016 has been issued to the appellant. Ld. Counsel has submitted that the said Show Cause Notice was challenged by them before the Hon ble High Court of Madras vide Writ Petition No. 27001 of 2016 and the Writ Petition was disposed vide Order dated 31.08.2016. Merely because a Show Cause Notice has been issued or is pending adjudication, it cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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