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TMI Blog2018 (6) TMI 1433X X X X Extracts X X X X X X X X Extracts X X X X ..... by them. It is further seen that the flaps as well as tubes are packed inside the tyre and tube partially inflated to form the tyre set. From this it is evident that the tube and flap are nothing but accessories for the tyre and are cleared together with the tyre. It is nobody’s case that the tyre can be used without the tube and flap. The activity of procurement of tube/ flap and clearing the same along with tyre as sets cannot be termed to be activity of trading. Consequently, the demand made by the lower Authority in terms of Rule 6 (3) ibid cannot be sustained. Appeal allowed - decided in favor of appellant. X X X X Extracts X X X X X X X X Extracts X X X X ..... he opinion that the activity of procurement of tube, flap, etc and selling of the same amounted to the trading of goods. Since trading of goods was considered as an exempted service, the appellant was required to pay an amount at the rate of 5%/ 6% of the value of exempted services in terms of Rule 6 (3) (i) of the Cenvat Credit Rules, 2004. On these lines, after issue of show cause notices and the process and adjudication, the two impugned orders came to be issued in which the appellant was directed to reverse amounts as above. Further, interest and penalties were also levied. 3. Aggrieved by the decisions, present appeals have been filed. 4. With the above background we heard arguments from Shri Prasad Paranjpe Ld. Advocate as well as S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified the impugned order. i. He submitted that the activity of procurement of tubes/ flaps etc and selling the same along with tyres have been described by appellants in their books of accounts as 'Trading'. Even the Chartered Accountant whose certificate has been referred to by the Adjudicating Authority has described the sales of tube and flap as trading. Since trading is an exempted service the appellant was required to reverse Cenvat Credit as per Rule 6 (3) (i) of CCR, 2004. Consequently, he justified the impugned order. ii. He relied on the decision of the Hon'ble Kerala High Court in the case of Commissioner of Central Excise V/s Appollo Tyres Ltd. 2010 (259) ELT 194 (Kerala) in which the Hon'ble High Court, in similar circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he mischief of Rule 6 (3) (i) of CCR 2004. 10. It is seen that tubes, flaps etc are procured by the appellant with the objective of supplying the same along with tyres manufactured by them. It is further seen that the flaps as well as tubes are packed inside the tyre and tube partially inflated to form the tyre set. From this it is evident that the tube and flap are nothing but accessories for the tyre and are cleared together with the tyre. It is nobody's case that the tyre can be used without the tube and flap. It is further seen that excise duty is paid on the tyre set including the value of tube and flap. In these circumstances we cannot accept the view of the lower authority that the flap and tube have been procured and sold and activ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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