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TMI Blog2025 (3) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of trading. It is seen that the Honourable High Court of Madras in its decision in M/s. Ruchika Global Interlinks v The CESTAT, Chennai, [2017 (6) TMI 635 - MADRAS HIGH COURT] has held that 'learly, both before and after amendment, "exempted services" meant those taxable services, which were exempt from whole of Service Tax and, included those services on which Service Tax was not leviable, under Section 66 of the Finance Act. The inclusion in Explanation to Rule 2(e) "trading" was, without doubt, only clarificatory. As accepted by Mr. Jayachandran, the appellant had not been paying Service Tax on trading activity during the relevant period.' Again, in CCE Thane II v. Milton Polyplas (I) Pvt Ltd, [2019 (4) TMI 240 - BOMBAY HIGH COURT], the Honourable High Court of Bombay was deciding whether the notice issued invoking the erstwhile Rule 57 I of the MODVAT rules demanding fraudulently availed credit during the period 1995 to 1999 would abate as contended by the Respondent-assessee therein, since the MODVAT rules were omitted and/or substituted by CENVAT Rules w.e.f 1st April 2000. The effect of Section 38A, namely that it will not affect the previous operation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used exclusively in or in relation to manufacture of exempted goods or providing exempted services - Appeal disposed off by way of remand. X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) for taking credit on input services used for sale of LPG. The Department was of the view that as no central excise duty was paid on clearance of CALTEX LPG cylinders and service tax was also not paid (since they are not providing any output service in the bottling and sale of their own LPG cylinders), the appellants were not entitled to take credit of service tax paid on input services used for storage and bottling of LPG sold under the Brand Name 'CALTEX' and the ineligible cenvat credit taken is liable to be recovered. 3. Three SCNs came to be issued covering the period from April 2008 to March 2011 for the reasons stated therein and pursuant to the appellant's reply and hearing granted, the impugned OIOs came to be issued disallowing wrongly availed and utilized input service credit and proposing its recovery along with interest and proposals for imposing penalties as indicated therein. Aggrieved by the impugned OIOs the appellants preferred appeals which came to be rejected by the aforementioned impugned OIAs upholding the said OIOs. Assailing the impugned OIAs the appellants are before this Tribunal having preferred the subject appeals. 4. We have heard learned consultant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... STAT Ahmedabad d. Adani Energy Ltd v. C.S.T-Service Tax, Ahmedabad, 2022 (3) TMI 696- CESTAT Ahmedabad e. Commissioner of Central Excise & Service Tax, Ghaziabad v. M/s. Balson Paint Industries (India), 2018(6) TMI 1336- CESTAT Allahabad f. Emitec Emission Control Technologies (I) Pvt Ltd v Commissioner of Central Excise, Pune-I, 2017 (12) TMI 1298-CESTAT Mumbai. g. Commissioner of Central Excise, Ghaziabad v. Avon International Pvt. Ltd (Vice Versa), 2017 (5) TMI 1289-CESTAT Allahabad. 6. The learned authorized representative, Shri. Sanjay Kakkar emphatically contended that the identical issues have come up for consideration before the Hon'ble High Court of Madras in the case of M/s. FL Smidth Pvt Ltd v. The Commissioner of Central Excise [2014 (12) TMI 699-Madras High Court) wherein it was inter-alia held that there is no dispute that the appellant (therein) had availed credit on commission in respect of trading goods, which are not in or in relation to manufacture of final products and therefore there are not eligible to avail credit on the commission paid on trading goods. It was submitted that the issue again came up for elaborate discussion before the Hon'ble High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epted by Mr. Jayachandran. The argument, though, of Mr. Jayachandran is that, since, the formula of apportionment provided in Rule 6(3)(c) is applicable to exempted service, the same can only apply post 1-4-2011, as a clarification was made only on that day onwards. 10. To our minds, such a submission cannot be accepted. If, the appellant has accepted before us that he was not paying Service Tax on an activity, then the credit of services vis-a-vis input services could only be taken on a pro rata basis, as per the formula stipulated in Rule 6(3)(c), as it then obtained at the relevant point in time. 10.1 In this context, it may also be relevant to note, how exempted services was defined in Rule 2(e) of the 2004 Rules till 31-3-2011 and thereafter. Rule position till 31-3-2011 Rule 2(e): "exempted services" means taxable services which are exempt from the whole of the Service Tax leviable thereon, and includes services on which no Service Tax is leviable under Section 66 of the Finance Act Rule position with effect from 31-3-2011 Rule 2(e): "Exempted services" means taxable services which are exempt from the whole of the Service Tax leviable thereon, and includes service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n from the Judgement of the Honourable High Court of Delhi in Lally Automobiles Pvt Ltd v Commissioner (Adjudication), C.Ex, 2018 (17) GSTL 422 (Del) which has since been affirmed by the Honourable Supreme Court in Lally Automobiles Private Limited v. Commissioner - 2019 (24) G.S.T.L. J115 (S.C.) Moreover, by the Final Order No.41930/2018 dated 27.06.2018 in the case of SHV LPG India Pvt. Ltd v. Commissioner of Service Tax reported in 2018 (7) TMI 273-CESTAT-Chennai, for the prior period from September 2004 to March 2009, during which period also the appellants have taken the credit on common input services for the trading activity of LPG cylinders sold in their brand name as well as for providing output services of packing and storing LPG for BPCL, this Tribunal while setting aside the demand for the extended period on the ground of limitation, has however sustained the demand for the normal period. The appellants have not shown that the aforementioned Final Order has been set aside and thus, inter se the parties, the same has attained finality. In such circumstances, in the light of the decisions of the Honourable High Courts of Madras and Delhi as well as the Tribunal decisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erride, overrule, quash, recall, render invalid, rescind, rescindere, retract, reverse, revoke, set aside, vacate, void, withdraw." 14. On a conjoint reading of the three expressions "delete", "omit", and "repeal", it becomes clear that "delete" and "omit" are used interchangeably, so that when the expression "repeal" refers to "delete" it would necessarily take within its ken an omission as well. This being the case, we do not find any substance in the argument that a "repeal" amounts to an obliteration from the very beginning, whereas an "omission" is only in futuro. If the expression "delete" would amount to a "repeal", which the appellant's counsel does not deny, it is clear that a conjoint reading of Halsbury's Laws of England and the Legal Thesaurus cited hereinabove both lead to the same result, namely that an "omission" being tantamount to a "deletion" is a form of repeal. (emphasis supplied). The Hon'ble Supreme Court thereafter in para 24 held as under: 24. Fibre Board's case is a recent judgment which, as has correctly been argued by Shri Radhakrishnan, learned senior counsel on behalf of the revenue, clarifies the law in holding that an omission would amount to a r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appears, such amendment, repeal, supersession or rescinding shall not -- (a) revive anything not in force or existing at the time at which the amendment, repeal, supersession or rescinding takes effect; or (b) affect the previous operation of any rule, notification or order so amended, repealed, superseded or rescinded or anything duly done or suffered thereunder; or (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any rule, notification or order so amended, repealed, superseded or rescinded; or (d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed under or in violation of any rule, notification or order so amended, repealed, superseded or rescinded; or (e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced and any such penalty, forfeiture or punishment may be imposed at if the rule, notification or order, as the case may be, had not been amended, repealed, superseded or rescinded." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any right, privilege, obligation or liability acquired, accrued or incurred under any rule so amended, repealed, superseded or rescinded. This is further qualified by providing that any investigation, legal proceedings may be continued, as if the Rule had not been amended, rescinded, repealed or superseded. In fact, the above provision is an amalgamation of Sections 6 & 6A of the General Clauses Act, 1897 which applies to Acts, while Section 38A of the Act is specifically in relation to Rules under the Act. Thus, the view of the CESTAT cannot be upheld. (v) In the above view, this substantial question of law is answered in the affirmative i.e. in favour of the Appellant- Revenue and against the Respondent-Assessee. (emphasis supplied) 14. The effect of Section 38A, namely that it will not affect the previous operation of the rules and the right, privilege, obligation or liability acquired, accrued or incurred or incurred under the said repealed rules is subject to the caveat "unless a different intention appears", stipulated therein. However, while the Cenvat Credit Amendment Rules, 2011, notified by Notification No.3/2011-CE (NT) dated 01-03-2011, which came into effect from 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated as "exempted services". 17. In view of the foregoing facts borne out from the records and the discussions and findings stated above and in the light of the aforecited judicial precedents, we find that the matter needs to be remanded to the jurisdictional adjudicating authority in order to determine the extent to which the cenvat credit has been taken on the services which the appellants have claimed would be taxable services as specified in the sub-clauses of clause (105) of Section 65 of the Finance Act as listed in Rule 6(5), and credit of whole of service tax of which shall be allowed unless such service is used exclusively in or in relation to manufacture of exempted goods or providing exempted services. Upon such determination, the adjudicating authority is directed to allow such credit taken as they would be licit credit. Save for such credit, if any, the finding of the appellate authority with respect to the remaining availed and utilized input service credit; which has been found to be wrongly availed and utilized and which has been ordered to be recovered by the adjudicating authority along with the consequential interest thereon, and which stands upheld by the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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