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TMI Blog2014 (7) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... The appellant also undertakes trading of furniture, locks, air-conditioners, safes, etc. which are not manufactured by them. The appellant availed CENVAT credit of the service tax paid on various services such as advertisement, air-travel agent, architect, ATM operations, business auxiliary services, Business exhibition and business support services, insurance services, storage and warehousing services, telecommunication services, and so on. These services were used both for the manufacture of the excisable goods and the trading of non-excisable goods (goods not manufactured but traded by them). However they did not maintain separate accounts for the credit availed by them in respect of taxable activities and non-taxable activities. The appellant also did not declare to the department the availment of credit on non-taxable trading activities. Therefore, a show cause notice dated 4 th February, 2013 was issued to them proposing to demand an amount of Rs. 33,47,30,142/- being the ineligible amount of credit availed by them during the period Jan-March 2008, 2008-09, 2009-10 and 2010-11 as trading was not a taxable service at all during the said period. The ineligible amount of credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng authority erred in placing reliance on the decision of the Tribunal in the Orion Appliances case [2010 (19) STR 205] to disallow CENVAT credit as the formula prescribed in the said case for reversal of credit cannot be compared with the formula prescribed under Rule 6(3A) of the CCR. CENVAT credit is available in its entirety and without any requirement of reversal as in respect of the traded goods, the appellants have undertaken output services such as repair, maintenance, installation and commissioning services. Reliance is placed on the following decisions:- (a) Badrika Motors (P) Ltd.; (b) Shariff Motors; (c) Faber Heatcraft Industries Ltd. [2008 (232) ELT 182]; (d) Ghatge Patil Autofarm Machinization; (5) Extended time period to confirm the demand is not permissible in as much as the department was aware of the availment of credit in respect of trading activities as early as in Feb to April 2007, when the audit of the records of the appellants for the period 1-4-2001 to 31-3-2006 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 11A. if the appellant is mainly a service provider, recovery will be made under the said rule 14 read with section 73 of the Finance Act. In the present case, the appellant is a manufacture of excisable goods and the credit taken on input services has been utilized for payment of duty on excisable goods. Therefore, the correct provision for recovery of wrongly availed credit is Rule 14 of CCR, 2004 read with Section 11A of the Central Excise Act, 1944. Therefore, we do not find any infirmity in the legal provisions cited for recovery of credit. 5.2 As regards the question of jurisdiction raised by the appellant, this is also incorrect and untenable. Wrongly availed credit has to be recovered from the person who has availed the credit and not from the person who has distributed the credit. In the present case, it is the appellant who is a central excise registrant who has availed the credit and therefore, recovery of wrongly availed credit has to be made from the appellant by the jurisdictional excise authorities. Therefore, we do not find any lack of jurisdiction in the present case. It is also worth noting that during the course of arguments, these points were not agitated/re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices and the output/output services which are taxable. Credit of input/input service tax is not permissible when the output or output service is not taxable. This implies that the cost of input/input services should form part of the value of the output/output service. This is the Essence of CENVAT credit scheme based on invoice based tax credit method. A plain reading of Rule 3 of CCR, 2004 makes this position abundantly clear. The hon'ble Apex Court considered the scope of CENVAT credit scheme in the Maruti Suzuki case [2009 (240) ELT 641 (SC)] and held that unless there is a nexus between the input on which credit is taken and the out manufactured, CENVAT credit cannot be taken. The same ratio would apply in respect of input services also. In view of this position, the appellant could not have taken any credit on common input services used in the manufacture of excisable goods and traded goods prior to 1-4-2011 when trading was not a taxable service to the extent it is attributable to the traded goods. In the present case, from the records it is seen that the appellant has availed CENVAT credit on a host of inputs services without any evidence whatsoever with regard to its ..... X X X X Extracts X X X X X X X X Extracts X X X X
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