9911796707
TMI Blog2007 (3) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... y alongwith interest on M/s Colgate-Palmolive (I) Ltd. 2. The allegation in brief is that the applicant has availed and utilized inadmissible Cenvat credit on common input services which were used in or in relation to the manufacture of both dutiable and exempted final products and also in relation to traded goods. 3. Applicant is having units at Sewn, Mumbai, Aurangabad and in Himachal Pradesh. The unit in Himachal Pradesh came into existence in April 2005 and the goods manufactured in that unit are completely exempted from duty. This unit in Baddi (H.P.) was only manufacturing tooth paste which was also being manufactured by Sewn unit. The Aurangabad unit on the other hand was manufacturing tooth power and shaving cream out of whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dutiable goods, exempted goods as well traded goods i.e. goods got manufactured by contract manufacturers, the assessee neither maintained a separate account nor paid 10% of the value of the exempted goods at the time of clearance and there fore the credit could not have been availed and a show cause notice was accordingly issued proposing to deny the entire credit availed on common input services which was confirmed and penalty of equivalent amount imposed. 4. Heard both sides. 5. We have considered the submissions. The plea of the applicant is that the input service has been defined in Rule 2(1) of the Cenvat Credit Rules, 2004 which reads as under :- "(1) "input service" means any service, (i) used by a provider of taxable s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore irrespective of the fact whether they are used in or in relation to the manufacture of final product, the credit cannot be denied. 1 6. Alternate plea was made that Rule 6(1) states that "the CENVAT credit shall not be allowed on such quantity of input or input service which is used in the manufacture of exempted goods or exempted services, except in the circumstances mentioned in sub-rule (2)." It was submitted that unlike Rule 2(1), Rule 6 seeks to deny the credit only in respect of such input service which is used in the manufacture of exempted goods and does not debar taking credit in respect of input service which is used in relation to the manufacture of exempted goods. Services provided by them i.e. advertisement, market r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacture both dutiable as well as final product. There is no reference to input service used in manufacture or used in or in relation to the manufacture. Similarly Rule 6(4) seeks to deny Cenvat credit on capital goods which are used exclusively in the manufacture of exempted goods and explanation III to Rule 3 also provides that credit shall not be allowed on inputs and input services used exclusively for the manufacture of exempted goods. Surely it cannot be the applicants' case that even in respect of service used exclusively for manufacture of exempted goods, services which are used in relation to manufacture of exempted goods will nevertheless be entitled to credit. Once input service itself has been denied as being service used in or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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