Page 190 - ELT_15th June 2020_VOL 372_Part 6th

868 EXCISE LAW TIMES [ Vol. 372

ibid not sustainable as objective of Rule 6 ibid already achieved - Any amount
recovered over and above actual Cenvat credit availed for exempted
goods/services do not form part of Cenvat credit required to be reversed, there-
fore not legal - Demand under Rule 6(3A)(i) ibid not sustainable - Rules 6, 14
and 15(2) of Cenvat Credit Rules, 2004. [paras 10, 12]
Appeal allowed
CASES CITED
Commissioner v. Himmat Glazed Tiles — 2018 (15) G.S.T.L. 486 (Guj.) — Referred ..................... [Para 6]
HMM Coaches Ltd. v. Commissioner — 2016 (337) E.L.T. 598 (Tribunal) — Referred .................. [Para 6]
Jost’s Engineering Co. Ltd. v. Commissioner — 2015 (320) E.L.T. 157 (Tribunal) — Referred ..... [Para 6]
Mercedes Benz India Pvt. Ltd. v. Commissioner — 2015 (40) S.T.R. 381 (Tribunal)
— Relied on ......................................................................................................................... [Paras 6, 11, 12]
REPRESENTED BY : Shri Ankit Kanodia, CA, for the Appellant.
Shri S.S. Chattopadhyay, Supdt. (AR), for the
Respondent.
[Order]. - The appellant assessee is in appeal against the order-in-appeal
dated 16-2-2018 wherein demand of Cenvat credit reversal amounting to
Rs. 6,94,356/- under Rule 6(3) of the Cenvat Credit Rules, 2004 on account of
trading of goods and provision of taxable service was confirmed by the Ld.
Commissioner (Appeals) on appeal filed by the Department against the order-in-
original dated 31-3-2016. Vide the said order-in-appeal equivalent penalty has
also been imposed with applicable interest.
2. Briefly stated, the facts of the case are that the appellant, M/s. Etrans
Solutions Private Limited, is engaged in the business of providing vehicle track-
ing system through smart card/swipe card and Global Positioning System (GPS)
and is accordingly registered under Business Support services. They are also en-
gaged in some trading activity of GPS units procured from suppliers and sold to
customers for tracking the movement of vehicles on real time basis. In terms of
the order received from customers, the appellant provides the services of vehicle
tracking system and also sells the GPS units to different customers. The appellant
maintains common balance sheet for their manufacturing as well as trading ac-
tivity. The appellant availed Cenvat credit under Cenvat Credit Rules, 2004 on
input and input services used in or in relation to the manufacture of finished
goods. In this background, a spot memo dated 29-11-2013 was issued by the Ser-
vice tax audit team and the appellant was asked to pay an amount of
Rs. 6,94,356/- being 6% of the exempted turnover under Rule 6(3)(i) of the Cen-
vat Credit Rules, 2004. The appellant vide their reply dated 18-8-2014 to the said
spot memo, paid an amount of Rs. 2,467/- vide Challan No. 00185, dated 16-8-
2014 along with interest of Rs. 807/- being proportionate Cenvat credit reversed
by following the procedure as prescribed in Rule 6(3)(ii) of the said Rules. How-
ever, Show cause notice, dated 20-10-2014 was issued to the appellant for non-
compliance of provisions of Rule 6(3) of the Cenvat Credit Rules, 2004 as the ap-
pellant neither maintained separate records for receipt and consumption of
common services used for manufacture of dutiable goods and provisions for ex-
empted services viz. trading nor they were restricting availment of credit to the
extent of input services used in manufacture of dutiable goods and thus the de-
mand of Rs. 6,94,356/- was made under Rule 6(3)(i) of the said Rules.
The said show cause notice culminated into order-in-original, dated
31-3-2016 wherein the Ld. Adjudicating Authority dropped the said demand of
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