Case Law Details
HIL Limited Vs C.C.E. & S.T. (CESTAT Ahmedabad)
In this case though initially the appellant have taken the cenvat credit on the common input service which were used for manufacture of dutiable goods as well in relation to exempted service i.e. trading activity, however, on pointing out by the department, the appellant have calculated the proportionate credit in respect of common input service attributed to the trading activity and paid the same along with interest. After payment of such proportionate credit, the situation became as if no cenvat credit was taken in respect of common input service attributed to the trading activity as held by the Hon’ble Supreme Court in the case of CHANDRAPUR MAGNET WIRES (P) LTD. VS. COLLECTOR OF C.EX., NAGPUR –1996 (81) ELT 3 (SC). In Rule 6(3) from the different options provided to the assessee in addition to 6/7% payment an option for proportionate reversal of the credit is also provided. This tribunal time and again taken a view that whether option is availed in advance or later stage it is prerogative to the assesse to choose any one of the option. Therefore, merely because the appellant at the relevant time did not opt for any of the option, revenue cannot impose upon the appellant a particular option i.e. payment of 6/7% of the value of the goods/service. On this issue much water has flown as per the various judgments cited by the appellant. Therefore, once it is admitted fact that the appellant have reversed the cenvat credit in respect of common input service attributed to the trading activity and also paid the interest thereon at the relevant time, no demand of 6/7% of the value of the trading activity will sustain. 05. Accordingly, the impugned order is set aside. Appeal is allowed with consequential relief.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The issue involved in the present case is that whether the appellant is liable to pay 6/7% of the value of the traded goods considering the same as exempted goods when cenvat credit was availed on the common input service attributed to the dutiable goods as well as exempted service i.e. trading activity, in this case, when the appellant was admittedly reversing the proportionate credit attributed to the trading activity along with interest. 02. Shri Deepak Kumar Jain, learned Chartered Accountant appearing on behalf of the appellant submits that the demand of 6/7% was raised by the department on the ground that the appellant have not opted for any of the option before any stage therefore, they are liable to pay 6/7% in terms of Rule 6(3). He submits that the appellant have reversed the cenvat credit in respect of common input service attributed to the exempted service i.e. trading activity and have also paid the interest from the date of taking credit till the date of reversal therefore, as per one of the options provided under
Rule 6(3), the appellant cannot be demanded the amount of 6/7% of the value of the exempted service. He placed reliance on the following judgments:-
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