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TMI Blog2016 (6) TMI 230X X X X Extracts X X X X X X X X Extracts X X X X ..... d by legislature for computing value in case of common inputs/input services used for trading activities when there is no separate accounts, the view that application of this method to arrive at the value would be more appropriate though it was introduced w.e.f. 01/04/2011 only. Therefore, direct the jurisdictional Superintendent to compute the value/amount of credit of common input services attributable to trading activity falling within the normal period as per the method provided in Rule 6(3D)(c) of CENVAT Credit Rules as applicable to trading. Thus hold that the appellant is liable to reverse such amount and interest thereon. The original authority has imposed equal amount of penalty. In the present case, as there is no suppression o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit on trading activity, along with its interest and also to impose penalty. After due process of law, the original authority confirmed the demand, interest and imposed equal amount of penalty. The appellant was of the opinion that the liability to reverse credit as per their method of computation would be ₹ 2,74,122/- only. The appellant reversed an amount of ₹ 2,74,122/- towards demand and ₹ 1,29,221/- towards interest which was adjusted to the demand and the interest. The appellant challenged the issue in appeal and vide the order impugned herein the Commissioner(Appeals) upheld the demand of CENVAT credit availed for trading activity and directed, the lower authority to re-quantify the amount. Being aggrieved, the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igarh [2015(40) STR 1121 (Tri. Del.)]. 4. In addition, the learned counsel submitted that the formula by which the department has arrived the demand/credit availed for trading activity as ₹ 4,76,651/- (including cess) is highly erroneous and against law. He explained that when the explanation was added w.e.f. 01/04/2011 clarifying that exempted services' includes trading', simultaneous amendment was made by introducing Clause (c) to Rule 6(3D) which deals with computation of credit attributable to trading when separate accounts are not maintained. As per this clause, in the case of trading, (value) shall be the difference between the sale price and the cost of goods sold (determined as per the generally accepted accountin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal may be dismissed. 6. I have heard both sides. One of the vehement argument put forward on behalf of the appellant is that the demand is time barred. The period involved is 2006-07 to 2010-2011. The show-cause notice is dated 01/12/2011. Part of the disputed period falls within the normal period and major portion falls within the extended period. The learned counsel for appellant submitted that the department was always aware that the appellants were engaged in trading activity also. It is seen that in 2003, appellants had issued letter seeking permission for trading of duty paid goods. Thus the contention of the appellants that the department was fully aware that appellant was engaged in trading activity also is not without force. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry strong words as fraud or collusion and therefore has to be construed strictly. Mere omission to give correct information is not a suppression of facts unless it was deliberate to evade the payment of duty. In Krishna Auto Sales case (supra) relied by the appellant, the Tribunal in similar set of facts has held that the extended period is not invokable. Following the dictum laid in the above case, I hold that the part of demand which falls within the extended period is not sustainable. 7. A very small period falls within the normal period. Undisputedly the appellant has availed the input services like, telephone, internet, travels, courier and insurance both for manufacturing and trading activities also. Trading became exempted ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue/amount of credit of common input services attributable to trading activity falling within the normal period as per the method provided in Rule 6(3D)(c) of CENVAT Credit Rules as applicable to trading. I hold that the appellant is liable to reverse such amount and interest thereon. 8. The original authority has imposed equal amount of penalty of ₹ 4,76,651/-. In the present case, as there is no suppression of facts or willful misstatement, the imposition of penalty is totally unjustified. Therefore the appellant is liable to pay the recomputed amount of credit attributable to trading along with interest only. The imposition of penalty is set aside. 9. The appeal is disposed off in above term with consequential reliefs, if any. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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