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2019 (5) TMI 1014

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..... e of goods for which vat is applicable and as because it is not a service, it is put in the exempted category as an example that trading is not a service for which exemption is also applicable. Likewise audit report cannot be the sole consideration for invocation of extended period to demand duty and impose of penalty under Section 11AC of the Central Excise Act. Moreover, application of formula for computation and arrival at a figure varies on the basis of understanding of the formula and its proper application that cannot be considered as wilful violation of the provision of the Act or Rule only on the ground that re-computation of the previous period on one occasion was accepted by the respondent and duty demand was met, since rule of ac .....

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..... ear 2011-12, appellant re-calculated as well as deposited differential amount along with interest amounting to ₹ 11,67,012/- but despite such corrections made, it continued to follow the old practice for post 2012 financial year for which it was put to show-cause notice on the basis of audit report, matter was adjudicated upon and duty demand along with interest and penalty were confirmed. In the appeal filed before the Commissioner (Appeals), the Order-in-Original was set aside. Appellant challenges the order passed by the Commissioner (Appeals) while respondent filed cross objection seeking confirmation of the said order. 3. In the memo of appeal and during the course of hearing of appeal, learned Authorised Representative Shri Anil .....

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..... ii) which is (M/N) * P, where M denotes total value of exempted services and goods, N denotes total value of output and exempted services & P denotes total value of input services taken during the financial year. He further contended that insistence of the department to categories P as the net CENVAT credit and not the gross CENVAT credit has resulted in such confusion in the calculation process and the method adopted by the respondent is appropriate for the reason that, to remove such confusion, the formula had been amended w.e.f. 01.03.2016 vide Notification No. 13/2006-CE(NT) and as held by the CESTAT, Bangalore in the case of M/s Foods, Fats & Fertilisers Ltd. Vs. Commissioner of Central Excise, Guntur reported in 2009 (247) ELT .....

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..... .2 On the other hand Service as defined under 65B (44) of the Finance Act, 1994 excludes (ii) such transfer, delivery or supply of any goods which is deemed to be a sale within the meaning of clause (29A) of article 366 of the Constitution. 6. From a bare reading of the definition and provision reproduced above, it is apparently clear that a pure sale, unassociated with delivery of goods and services together, is not to be considered as service. Therefore what is contained in Section 66D of the Finance Act, 1994 dealing with negative list of services concerning trading of goods and the clarificatory circular referred above as well as inclusion of the same in the explanation appended to clause 2(e) of the Cenvat Credit Rules 2004 are mere cl .....

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..... ect of receipt and expenditure of the Government of India. It also discharges revenue audit which covers central excise, service tax and customs laws during which time the assesses were examined by CERA audit party to point out the deficiencies, leakage of revenue and non recoveries of dues by the Central Excise Department. Therefore, it cannot be said that only because audit party had found some credit availed as inadmissible, suppression of fact is made out. 8. From the above discussion, it can very much will be inferred that trading is not at all a service, as it is a sale of goods for which vat is applicable and as because it is not a service, it is put in the exempted category as an example that trading is not a service for which exemp .....

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