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TMI Blog2008 (2) TMI 784X X X X Extracts X X X X X X X X Extracts X X X X ..... goods or exempted services used in the manufacture or in providing output services - it is clear that the advertisement and other services were utilized for items manufactured and marketed by the appellant, but incidentally the item imported were also sold. On that basis alone the input service credit availed by the appellant cannot be denied because there is no such situation envisaged under Rule 6 of Cenvat Credit Rules, 2004. Extended period of limitation - penalty - Held that: - this is a case of interpretation - the appellant acted with bona fide belief - invocation of longer period and imposition of equal penalty not sustainable. Appeal allowed - decided in favor of appellant. X X X X Extracts X X X X X X X X Extracts X X X X ..... ies; that Rule 3(1)(ix) and (xi)(ii) of Cenvat Credit Rules, 2004 provides that the manufacturer of final product or a provider of taxable service can avail of the credit of input service tax; that Rule 6(1) and 6(2) of Cenvat Credit Rules, 2004 provide for non-entitlement of credit of input service used in exempted goods or in providing exempted output services and for maintaining separate accounts for receipt, consumption and inventory of input services used in the manufacture of dutiable finished goods or in providing taxable output service and those input services which are used in exempted goods/services, respectively; that the appellant was not maintaining a separate account for input services used in the manufacture of goods and in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Credit Rules, 2004 along with interest under Section 11AB of Central Excise Act, 1944 read with Rule 14 of the Rules, in addition to imposing equal penalty under Section 11AC of the Act, holding that the appellant had not maintained separate account of input services of those used in the manufacturing activities and those used in the trading activities. He further held that in the absence of such separate records, the stand taken in the Show Cause Notice regarding apportioning of input service tax credit on the basis of the quantum of trading and manufacturing activities is just and logical. 2. Aggrieved by the above order the appellant has come up with the present appeal along with stay petition. The contention of the appellant are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... take the main appeal itself, if possible. During the course of hearing he reiterated the submissions made in the appeal memorandum as well as stay petition. In addition to the submission he further submitted that as regard to method of calculation there is no logic involved in apportioning the sale values for indigenous product and imported products out of the figures available from Balance Sheet and that as regards to time-bar aspect he submitted that to the departmental officers the required particulars were submitted on 19th and 29th of August, 2005 whereas the Show Cause Notice was issued to his client after a period of one year i.e. 19-12-2006. Thus in view of various decisions of the appellate forum, the Show Cause Notice stands void ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufactured goods but also to trading goods imported by them, from the department. Whereas the appellant contends that the input services were utilized in relation to business activities which includes marketing etc. and incidentally the goods imported by them also were marketed along with their own manufactured item. The appellant further contends that Rule 6 of Cenvat Credit Rules deals with manufactured exempted goods and not the trading goods and therefore they are not required to maintain separate accounts. They also contended that there is no logic in apportioning the amount between the manufactured items and trading items. The appellant further contends that the department has not invoked Rule 6 of the Cenvat Credit Rules on which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ked to ascertain whether the advertisement contains any information with regard to imported items. On going through some advertisements it was observed that the advertisement does not talk about any indigenous or imported items separately. This is a common advertisement for items marketed by the appellant. The CD enclosed by the advocate was also seen by me and the same also does not contain any reference to imported items. Therefore, it is clear that the advertisement and other services were utilized for items manufactured and marketed by the appellant, but incidentally the item imported were also sold. On that basis alone the input service credit availed by the appellant cannot be denied because there is no such situation envisaged under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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