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TMI Blog2018 (4) TMI 229X X X X Extracts X X X X X X X X Extracts X X X X ..... upheld. Demand of Interest and penalty - Held that: - since the appellant had a bona fide belief that trading is an exempted service even prior to 01/04/201 1 and they had sufficient balance of CENVAT credit during the year 2008-09, they are not liable to pay interest - as far as penalty is concerned, there is no suppression on the part of the appellant and during the relevant time, there were conflicting decisions, penalty also set aside. Appeal allowed in part. - Appeal(s) Involved: ST/25251/2013-SM - Final order no. 20355/2018 - Dated:- 7-3-2018 - SHRI S.S GARG, JUDICIAL MEMBER Shri Rajesh Kumar, CA HIREGANGE And ASSOCIATES, For the Appellant Dr, L Harish, Dy. Commissioner (AR), For the Respondent Per: SS GAR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same has been passed without considering the facts in the proper perspective and the provisions of the law. He further submitted that the provisions of Rule 6(1) read with Rule 6(2) and Rule 6(3) or Rule 6(3A) is applicable only when the input service are used for providing exempted services or in manufacture of exempted goods whereas the activity undertaken by the appellant by no stretch of imagination could be considered as exempted service and this aspect has not been considered in the impugned order. He further submitted that before April 201 1, the exempted service definition does not cover trading activity as exempted service. Only w.e.f. 01/04/2011, the. trading activity is considered as exempted services and not before that and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the relevant time, there were conflicting decisions, some in favour of the assessee and therefore there is no suppression on the part of the assessee to warrant imposition of penalty under Section 78 of the Act. For this, he relied upon the following decisions: - i. CCE vs. Sangrur Agro Ltd. [2010(254) ELT 25 (P H)] ii. Eastern Medikit Ltd. vs, CCE [2009(242) ELT 51 (Tri, Del.)] iii. Cherian Fabricators [Final Order No.20454/2017] iv. Colgate Palmolive India Ltd. vs. CCE [2011-TIOL-418-CESTATMUM] 5. On the other hand, the learned AR defended the impugned order and submitted that during the relevant period, trading activity was not an exempted service and it is only w.e.f. 01/04/201 1, it was made an exempted s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of final products from the place of removal. In the present case, the pre-heater valued at ₹ 5.41 crores is the final product, which was manufactured and cleared from the place of removal, ie., from the appellant's factory and the credit has been allowed by the department in respect of manufactured goods. The remaining goods valued at ₹ 36.04 crores were not manufactured as final product and cleared from the place of the appellant, In such a case, it would not qualify for the benefit of cenvat credit under Rule 2(1) of the cenvat credit Rule as rightly upheld by the commissioner (Appeals) and the tribunal. The service tax paid on sales commission in respect of procuring orders cannot be utilised by the appellant for taking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut error. The Tribunal in O rion Appliances Ltd, Vse CST, Ahmedabad [2011] 46 VST 192 (CESTAT) = 2010-T/OL-752CESTA T-AHM clearly held that trading is purchase and sale of goods, covered by sales tax law and cannot be considered a service or an exempted service. 7. After considering the submissions of both sides and perusal of records, I find that since the trading activity is not an exempted service during the relevant period, rule 6 is applicable to the appellant as held in the cases cited supra. By following the ratio of the above said decisions, I do not find any infirmity in the impugned order. 8. As far as interest and penalty liabilities are concerned, since the appellant had a bona fide belief that trading is an exempte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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