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TMI Blog2016 (1) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... activity - Explanation 2 to Rule 2(e) of CENVAT Credit Rules was added w.e.f. 01/04/2011 - Held that:- As is clear from the above Explanation, the same stands included in the definition of exempted services inasmuch as there were doubts in the field. The opening sentence of the said Explanation itself refers to the fact that the same is being added for removal of doubts. In such a scenario, the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the manufacturing unit and as such providing service under the category of 'Business Auxiliary Service'(BAS). Apart from that, they were also doing trading of the goods of the manufacturing unit. As the unit providing BAS and doing trading was paying service tax under the category of BAS, they were availing CENVAT credit of tax paid on various services so received by them for undertak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confusion as regards the meaning of the expression 'exempted services'. One view was that exempted services will not take into its ambit the services which were not at all taxable. Inasmuch as trading was not taxable service, the same was not considered by them as exempted service and as such there was no requirement of reversal of credit. He further explains that Explanation 2 to Rule 2(e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er considering the submissions by both the sides, we find that following Explanation was added to Rule 2(e) of CENVAT Credit Rules, "Explanation:- For removal of doubts, it is hereby clarified that "exempted services" includes trading". As is clear from the above Explanation, the same stands included in the definition of exempted services inasmuch as there were doubts in the f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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