TMI Blog2019 (8) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... input services used in the provision of exempt services (trading of goods) along with interest thereon - Therefore, Rule 6(3) (i) will not have any application, when a credit is taken wrongly and the same is reversed along with interest as it tantamounts to not taking of the credit at all. The demand confirmed by the lower appellate authority has no legs and therefore the same cannot be sustained - appeal allowed - decided in favor of appellant. - Appeal No.ST/77038/2018 - FO/A/75927/2019 - Dated:- 30-7-2019 - SHRI P.K. CHOUDHARY, MEMBER (JUDICIAL) Shri Ankit Kanodia, C. A. for the Appellant (s) Shri S. S. Chattopadhyay, Suptd. (AR) for the Respondent(s) ORDER PER SHRI P.K. CHOUDHARY: The appellant assessee is in appeal against the Order-in-Appeal dated 16/02/2018 wherein demand of CENVAT Credit reversal amounting to ₹ 6,94,356/- under Rule 6(3) of the Cenvat credit Rules, 2004 on account of trading of goods and provision of taxable service was confirmed by the Ld. Commissioner (Appeals) on appeal filed by the Department against the Order-in-Original dated 31/03/2016. Vide t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the adjudication order on this issue. Hence, the present appeal before the Tribunal by the appellant assessee. 3. Shri Ankit Kanodia, CA, appeared on behalf of the appellant and Shri S. S. Chattopadhyay, A.R. appeared on behalf of the respondent department. 4. The Ld. CA appearing for the appellant submitted that the appellant on being pointed by the department audit had reversed the proportionate CENVAT Credit availed on common input services used in provision of taxable service as well as trading of goods along with appropriate interest and thus had made sufficient compliance of Rule 6(3) of the Cenvat Credit Rules, 2004. He also submitted copies of statements showing year wise calculations of the common CENVAT Credit on input services and proportionate reversal done in this regard along with a Chartered Accountant s certificate certifying the submitted calculations. It is his contention that the Ld. Commissioner (Appeals), without considering the ratio of turnover from manufacturing activity vis a vis trading activity has merely confirmed the demand at 6% of the total exempted turnover i.e. trading of GPS units which cannot be sustained and being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the High Court in the case of (i) JOST ENGINEERING CO. LTD./ JAIPRAKASH CHAURASIA vs Commissioner of Central Excise, Mumbai-III 2013-TIOL-732-CESTAT-MUM, (ii) HMM Coaches Limited vs Commissioner of Central Excise, Panchkula, 2016(337) E.L.T. 598 (TRI.- CHAN), (iii) M/s MERCEDES BENZ INDIA (P) LIMITED VS COMMISSIONER OF CENTRAL EXCISE, PUNE-I 2015-TIOL-1550-CESTAT-MUM, (iv) COMMISSIONER OF CENTRAL GST AND CX Versus HIMMAT GLAZED TILES 2018 (15) G.S.T.L. 486 (Guj.). 7. The learned Authorized Representative for the Department, reiterates the findings of the Ld. Commissioner (Appeals). He submits that the appellant paid the amount of CENVAT Credit attributable to the input services used in exempted services i.e. trading of GPS units but procedure was not followed inasmuch as in the beginning of the financial year, have not intimated in writing to the Jurisdictional superintendent regarding the availment of the option provided under clause (ii) of Rule 6(3). They have not furnished the information as provided under clause (i) to (v) of sub clause (a) of Rule 6(3A). Once the appellant became disentitled for this option, the other option available is under rule 6(3)(i) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to the manufacture of exempted goods and their clearance upto the place of removal; (ii) in or in relation to the manufacture of dutiable final products, excluding exempted goods, and their clearance upto the place of removal; (iii) for the provision of exempted services; and (iv) for the provision of output services excluding exempted services, and shall take CENVAT credit only on inputs under sub-clauses (ii) and (iv) of clause (a) and input services under sub-clauses (ii) and (iv) of clause (b).] [(3) Notwithstanding anything contained in sub-rules (1) and (2), the manufacturer of goods or the provider of output service, opting not to maintain separate accounts, shall follow [any one] of the following options, as applicable to him, namely :- [(i) pay an amount equal to [six per cent.] of value of the exempted goods and exempted services; or (ii) pay an amount as determined under sub-rule (3A); or (iii) maintain separate accounts for the receipt, consumption and inventory of inputs as provided for in clause (a) of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmon credit taken on input services used in the provision of exempt services (trading of goods) along with interest thereon. Therefore, Rule 6(3) (i) will not have any application, when a credit is taken wrongly and the same is reversed along with interest as it tantamounts to not taking of the credit at all. 11. I find that the Tribunal in the case of M/s MERCEDES BENZ INDIA (P) LIMITED VS COMMISSIONER OF CENTRAL EXCISE, PUNE-I (Supra) while dealing with a similar situation has held as under:- 5.4 We find that the appellant admittedly paid an amount of ₹ 4 ,06,785 /plus interest, this is not under dispute. Therefore in our view, the appellant have complied with the condition prescribed under Rule 6(3)(ii) read with sub rule (3A) of Rule 6 of Cenvat Credit Rules, therefore demand of huge amount of ₹ 24,71,93,529/of the total value of the vehicle amounting to ₹ 494,38,70,577/sold in the market cannot be demanded. We are also of the view that Rule 6 of the Cenvat Credit Rules is not enacted to extract illegal amount from the assessee. The main objective of the Rule 6 is to ensure that the assessee should not avail the Cenvat Credit in respect of in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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