Case Law Details
Court: CESTAT (Ahmedabad Bench)
Citation: Orion Appliances Ltd. Vs. CST Ahmedabad 2010-VIL-10-CESTAT-AHM
Background- Since the inception of Cenvat Credit Rules, there has been a debate on the application of Cenvat Credit Rules viz a viz trading activity. The Cenvat Credit Rules do not have any provision to govern a situation where common ‘inputs’/ ‘input services’ are used by an assessee engaged in providing output service/ manufacturing dutiable goods and, at the same time, also undertaking ‘trading activity’.
Certain assesses have been contending that as trading activity is not covered in the definition of ‘exempted services’/’exempted goods’, no restriction applies and full Cenvat credit can be availed on ‘input services’ which are used commonly for providing output service/ manufacturing dutiable goods as well as undertaking trading activity.
On the other hand, the Department has been taking a stand that credit to the extent it relates to trading activity should not be allowed.
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We would like to comment on the above that we are the Registered dealer and pass on the
CENVAT to Buyer. if it is trading activity then during the activity we are charged the
commission on sales/trading of goods and hence we have to pay the service tax on commission as Business Auxiliary Service if we are service provider then we can availe the service tax
on inputs service. of GTO inward , Courier,Banks,telephone,import service, Clearing & Forwarding etc.