TMI Blog2019 (2) TMI 943X X X X Extracts X X X X X X X X Extracts X X X X ..... ted:- 1-2-2019 - Mr. Justice Mohammad Rafiq And Mr. Justice Goverdhan Bardhar For the Appellant(s) : Shri Arjun Singh with Shri Shashank K. Agarwal For the Respondent(s) : Shri Sandeep Pathak with Ms. Vartika Mehra JUDGMENT (PER HON BLE MOHAMMAD RAFIQ, J.) This appeal is directed against the judgement of the Customs, Excise Service Tax Appellate Tribunal dated 16.10.2017, whereby the appeal of the appellant was dismissed. The appeal was admitted for hearing on the following substantial question of law: i) Whether in the facts and circumstances of the case, CENVAT credit of service tax paid on input services like Banking, Auditing, Security services etc. can be denied under value added tax, CENVAT Credit Rules, 2004 prior to 1.4.2011 read with notification No.3/2011 dated 1.3.2011 on the ground that specified services were exclusively under for traded goods? ii) Whether extended period can be applied on the matters of interpretation, and applicability of CENVAT Credit Rules, 2004 admissibility wherein no intention to evade payment of duty coupled with suppression, fraud, mis-statement, collusion is in existence as required under section 11A of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service etc. cannot be held to have been used in manufacturing activity and other part in trading activity is highly wrong and a misinterpretation and against the principles of commercial expediency. The trading activity was not even notified service during the relevant period under the Finance Act. The allegation levelled in the show cause notice pertains to the fact that the appellant has taken credit on the auditing service, security, service, banking service which was commonly used with the manufacturing activity as well as trading activity and as per Rule 6 read with Rule 9, the same is not permissible. But it was only with effect from 1.4.2011 vide notification no.3/2011 dated 1.3.2011 that the trading activity was deemed to be decalred as exempted service to invoke the provisions of Rule 6 read with Rule 9 and 3 of the CENVAT Credit Rules. Reliance has been placed before the Tribunal on the judgement in 2011 (271) ELT 308, 2017 (52) STR 155, which have not been properly considered. The appellant was duly registered and was maintaining the specified statutory records, which were duly assessed from time to time and central excise audit was also conducted by the office on early ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that vide letter dated 07.02.2011, the appellant was asked to submit details regarding service tax paid. However, the information sought from the appellant was never provided. It is further submitted that the appellant has nowhere pleaded that they were unaware about the provisions regarding CENVAT Credit. As such they were well aware that CENVAT Credit could only be availed with respect to good manufactured by the assessee. The appellant has availed CENVAT Credit on services utilized with respect to traded goods, which is in gross violation of the CENVAT Credit Rules, 2004. Therefore, in view of the provisions of the CENVAT Credit Rules, 2004, Central Excise Act, 1944 and the judgment passed by the Supreme Court, it is submitted that extended period of limitation has rightly been applied in the case of the applicant. It is therefore, most respectfully prayed that the appeal may be dismissed. We have given our anxious consideration to the rival submissions and perused the material on record. The adjudicating authority held that Rule 6 disallows a manufacturer credit in respect of quantity of inputs or inputs services which are used for manufacture of exempted goods or for pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation of Rule 6 of CCR for maintenance of separate records etc. We are not in agreement with such proposition. Admittedly, it is the responsibility of the assessee to follow the provisions of Cenvat Credit Rules, 2004. Rule 9(6) of the CCR Rules states as below:- Rule 9 (6) The manufacturer of final products or the provider of output service shall maintain proper records for the receipt and consumption of the input services in which the relevant information regarding the value, tax paid, CENVAT credit taken and utilized, the person from whom the input service has been procured is recorded and the burden of proof regarding the admissibility of the CENVAT credit shall lie upon the manufacturer or provider of output service taking such credit. 6. The appellants claimed that there is no application of Rule 6 as the trading cannot be considered as an exempted service prior to 1.4.2011. We note that legal fiction given in the Explanation in order to remove doubts was introduced on 1.4.2011. Even if it is considered that trading is not an exempted service, it is also a fact that it cannot be considered as a service within the scope of Finance Act, 1994 during the material tim ..... 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