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TMI Blog2024 (10) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... s. In addition to this, the Appellant is also engaged in trading of goods, which is an exempted service and thus, no Cenvat credit was availed by the Appellant on the input services, which were exclusively used for trading activity. However, certain input services, on which Cenvat credit was availed, namely, Warehouse Support Services, Goods Transport Agency (inward freight), Renting of Warehouse, Legal & Consultancy Services etc., were used by the Appellant in both manufacture of dutiable goods and provision of exempted services i.e. trading. Such common Cenvat credit was availed by the Appellant, following the procedure of proportionate reversal of Cenvat Credit amount attributable to exempted service under Rule 6(3A) of the CENVAT Credit Rules, 2004 C.C.R.2004 as per the formula prescribed therein, under due intimation letter filed at the beginning of each Financial Year, to the Excise Range Office. 4. An Audit of the Appellant's records was conducted by the Department for the period April 2013 to March 2014. The audit team raised an objection that the Appellant had short reversed an amount of Rs. 2,93,347/- towards Cenvat credit under Rule 6(3)(b) of the C.C.R.2004 as the Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the aforesaid SCN for the period 2014-15. The Appellant filed their reply vide letter dated 22.03.2016. 8. After considering the defence reply filed by the Appellant on 20.11.2015 and 22.03.2016, the Ld. Assistant Commissioner, vide the Order-in-Original No. 31 & 32/ADC/ST/ Noida/ 2016-2017 dated 23.08.2016, upheld all the allegations contained in the SCN and confirmed the demand raised in the SCN, alongwith interest and also imposed penalty. 9. On appeal filed by the Appellant dated 27.10.2016, the Ld. Commissioner (Appeals) vide the impugned Order-in-Appeal No. NOI-EXCUS-002-APP-1475-17-18 dated 15.12.2017, upheld the demand as well as penalty. Being aggrieved, the Appellant has filed the present appeal before the Tribunal. 10. Heard both the sides and perused the appeal records. 11. We find that in the present case, the only dispute is whether the CENVAT Credit, availed on the input services used exclusively in the manufacture of the dutiable goods, was required to be included in the numerator for apportioning the common credit between the exempted service (trading) and dutiable goods. 12. This issue is no more res integra as it has been held that the CENVAT Credit, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries Ltd. - 2019 (28) G.S.T.L. 96 (Tribunal) "8. From the reading of Rule 6(1), it is clear that only in respect of input or input service used in exempted goods are not allowed. That means input or input service used in taxable service/dutiable goods, Cenvat credit is allowed. Sub-rule (2) of Rule 6 is only as an option that if any input or input services used in exempted goods, credit should not be allowed and only with this intention some mechanisms for expunging Cenvat credit attributed only to the exempted goods are provided. As per clause (b)(ii) & (iv), it is clearly provided that entire credit in respect of receipt and use of inputs/input service is allowed when such input and input service is used in dutiable final products and taxable service. However, nowhere in Rule 6 it is provided that the input or input service used in dutiable goods shall not be allowed. The Revenue is only interpreting the term "total Cenvat credit" provided under the formula. If the whole Rule 6(1), (2) and (3) is read harmoniously and conjointly, it is clear that "Total Cenvat Credit" for the purpose of formula under Rule 6(3A) is only total Cenvat credit of common input service and will not in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amendment in Rule 6(3A) by virtue of substitution was clarified by the Board vide TRU Circular No. 334/8/2016-TRU dated 29.02.2016, to apply retrospectively. The clarification clearly mentioned that the provisions of Rule 6 providing for reversal of Credit in respect of input services used w.r.t. exempted goods/services, is being redrafted with the objective to simplify and rationalize the same without altering the established principles of reversal of such credit. It has been further clarified at paragraph (iv), that the purpose of the Rule is to deny credit of such part of the total credit taken, as is attributable to the exempted goods/services and under no circumstances this part can be greater than the whole credit. 18. Further, in the following decisions where similar proposition was laid down regarding the interpretation of the term "Total Cenvat credit" in Rule 6(3A): Thyssenkrupp Industrial Solutions (India) Private Limited vs. Commissioner of Central Tax, Mumbai, 2022 (6) TMI 468 - CESTAT MUMBAI) JWC Logistics Park Pvt. Ltd. vs. Commissioner of Central Excise & Service Tax, Raigad, 2022 (5) TMI 430 - CESTAT MUMBAI Reliance Industries Limited vs. Commissioner of Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant date in terms of Section 73(6)(i)(a) of the Finance Act, 1994. The demand of Rs. 6,19,010/- for the period April 2010 to March 2013 is barred by limitation in as much as the SCN for the said period has been issued beyond 18 months from the relevant date. 23 To invoke proviso to Section 73(1), the conditions stated therein is required to be fulfilled, it should be proved that the Appellant had, by some positive act, suppressed the fact from the department with an intention to evade irregular Cenvat credit. 24. There is no suppression of facts in the instant case. It is observed that the Appellant periodically intimated the department about their selection of option to reverse Cenvat credit under Rule 6(3A) of CCR. They have also intimated the department about the amount of credit reversed by them. Hence the department already had the knowledge of the said transactions. Moreover, mere fact that the dispute on eligibility of impugned credit is disputed by the department does not ipso facto mean the fact was suppressed. 25. The Appellant has been regularly submitting the ST -3 returns, it is for the department to scrutinize the same as per the stipulations contained in the CB ..... X X X X Extracts X X X X X X X X Extracts X X X X
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