Case Law Details
Dorma India Pvt. Ltd. Vs Commissioner of GST & Central Excise (CESTAT Chennai)
CESTAT Chennai held that cenvat credit availed on trading activity is not admissible, accordingly, cenvat credit admissible on common input services needs to be reversed by invoking the extended period of limitation.
Facts-
The appellant is engaged in manufacture of “Automatic Door Operators and Door Closures” and parts falling under Chapter Sub-heading 83 of CETA, 1985. The appellant was also engaged in trading activity of imported as well as locally procured components and inputs.
After investigation, it was found that the appellant availed and utilized credit of common input services used for trading as well as for manufacturing activity which is ineligible as trading activity is neither a service nor activity of manufacture. Appellants had not maintained separate accounts for the common input service used for manufacturing activity and trading activity and had not reversed the proportionate credit availed for trading activity. In view of the above, Show Cause Notice No. 6/2011 dated 1.4.2011 was issued for the period from March 2006 to February 2011 proposing to recover the wrongly availed / ineligible CENVAT credit of service tax paid on input services of Rs.2,01,40,209/-. After due process of law, the original authority confirmed the demand along with interest and also imposed penalties. Aggrieved by such order, the appellant is now before the Tribunal.
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