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TMI Blog2018 (6) TMI 378X X X X Extracts X X X X X X X X Extracts X X X X ..... ances, they were not able to use the goods in the manufacture of final products. They have opted to clear the goods as such, under the provision of Rule 3(5) by reversing the credit - demand cannot sustain - appeal allowed - decided in favor of appellant. - Appeal No. E/42615/2017 - Final Order No. 41747 / 2018 - Dated:- 6-6-2018 - Ms. Sulekha Beevi C.S., Member ( Judicial ) Shri Sai Prasanth, Advocate for the Appellant Shri R. Subramaniyan, AC ( AR ) for the Respondent ORDER Brief facts are that the appellants are engaged in manufacturing gears, gear boxes and accessories. During the course of verification of their accounts, it was noticed that they are also doing trading activity from their factory premises by way of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounts to trading and, therefore, they are liable to pay an amount of 5%/6% of the value of traded goods. That the impugned order does not call for interference. 4. Heard both sides. 5. It is seen from the submission made by both sides as well as the records that the appellants have reversed the credit, as under Rule 3(5), when they have cleared the goods as such. In a normal trading activity, the goods which are procured, are sold and there is no question of availing the credit of such goods or clearing them on the payment of duty. In the present case, the appellant has availed credit on the inputs and, in some circumstances, they were not able to use the goods in the manufacture of final products. They have opted to clear the good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t under Rule 6 equal to 5%/6% of the value of the traded goods i.e. steel sheets sold to their vendor. There is no dispute that the said removal is governed by Rule 3(5) of the Cenvat Credit Rules, 2004. It is admitted fact that the appellant has cleared the said steel sheets on payment of duty. The department is considering the said clearances as exempted service being a trading activity. I find that though this removal of steel sheets is indeed a trading activity, but the said clearances were made on payment of excise duty. Therefore, it cannot be considered as an exempted service. Rule 6 applies on the trading activity only in a case when the goods are purchased and sold without taking credit and without payment of duty. Then only such t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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