Proportionate Cenvat Credit Reversal Upheld: Trading Not Exempted Before 2011

ITW India Ltd Vs Commissioner of Central Tax Medchal – GST (CESTAT Hyderabad) Conclusion: Since common input services were used for both taxable output and trading, assessee was required to reverse proportionate credit attributable to trading along with interest. Penalty under Rule 15(3) to be confined to proportionate irregular credit finally determined. Held: Assessee-company was engaged in manufacture of excisable goods and provision of taxable services and was also involved in trading activities. Department viewed trading as an “exempted service” and alleged irregular availment ...