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TMI Blog2015 (12) TMI 249X X X X Extracts X X X X X X X X Extracts X X X X ..... apital goods and service tax paid on various input services as per the provisions of Cenvat Credit Rules, 2004. The services in respect of which cenvat credit has been availed are telephone, inward transportation services, courier services as well as sales promotion services, etc. The appellant, in addition to selling their finished products manufactured from the inputs were also selling the inputs as such on reversal of the cenvat credit as per the provisions of cenvat Credit Rules. The period of dispute in this case is from 2007-2008 to 2010-2011. The departments contention is that the sale of cenvated inputs as such is trading activity, which is exempted service in terms of the Rule 2(e) of the Cenvat Credit Rules, 2004 and hence, in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n under Section 11 AB/11 AA of the Central Excise Act, 1944 and besides this, imposed penalty on the appellant under Rule 15 of the Cenvat Credit Rules read with Section 11 AC of the Central Excise Act, 1944. He ordered appropriation of an amount of Rs. 2,84,404/- already paid by the appellant against the aforesaid demand. In course of proceedings before the Commissioner, it was pleaded on behalf of the appellant that the definition of exempted service given in Rule 2(e) of the Cenvat Credit Rules, 2004 was amended to include trading activities w.e.f. 1.4.2011 and that this amended provision cannot be given retrospective effect and that in any case, the value of the trading services in terms of the Explanation I (C) to Rule 6 (3D) of Cenv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of Rule 3(5) of the Cenvat Credit Rules, 2004, only cenvat credit taken is required to be reversed and cenvat credit in respect of input service availed at the time of receipt of the input is not required to be reversed, that in this regard, he relies upon the judgment of the Honble Punjab & Haryana High Court in the case of CCE, Chandigarh-I Vs. Punjab Steel reported in 2010 (260) ELT 521 (P&H), that during the period of dispute, the trading activities could not be treated as exempted services, that though Rule 2 (e) of the Cenvat Credit Rules, 2004 regarding definition of exempted service was amended w.e.f. 1.4.2011 by adding an Explanation that for removal of doubts, it is hereby clarified that exempted services includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Punjab Steel [2010 (260) ELT 521 (P&H)], in case of removal of cenvat credit availed inputs as such, only the cenvat credit in respect of inputs is required to be reversed, not the cenvat credit in respect of input service received at the time of receipt of inputs, that the appellant have strong prima facie case in their favour and hence, the requirement of pre-deposit of the amount demanded under Rule 6(3)(i) of the Cenvat Credit Rules, 2004, interest thereon and penalty may be waived for hearing of the appeal and recovery thereof may be stayed till the disposal of the appeal. 4. Shri Ranjan Khanna, ld. Departmental Representative, opposed the stay application by reiterating the findings of the Commissioner in the impugned order and em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2004. The department's contention is that since the sale of the inputs as such is a trading activity and since certain common input services have been used, in respect of which cenvat credit had been taken and no separate account and inventory of the services used in the manufacture of dutiable final products and used for trading activities have been maintained, in respect of the trading service, which is an exempted service, the appellant would be required to pay an amount 8% / 6% of the value of the trading service and in this regard, the value of the trading service has been taken as the value of the goods sold and not the difference between the sale price of the goods and the cost of the goods sold or 10% of the cost of the goods sold, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Explanation (I)(c ) to sub-rule (3D) of Rule 6, also introduced w.e.f. 01.04.2011, cannot be given retrospective effect and is applicable prospectively and accordingly during the period prior to 01.04.2011, the value of the trading services would be the value of the goods traded on the sale price of the goods is absurd. 8. In our prima facie view, when the goods traded are the cenvated inputs in respect of which cenvat credit availed, has been reversed as per the provisions of Rule 3(5) of the Cenvat Credit Rules, 2004, no reversal of the cenvat credit in respect of the input services like GTA service and transit insurance service availed at the time of receipt of the goods is required in view of the judgment of the Punjab High Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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