VLCC HEALTHCARE LTD. Vs. COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH
LAWS(CE)-2015-1-40
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on January 01,2015

Vlcc Healthcare Ltd. Appellant
VERSUS
COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH Respondents




JUDGEMENT

Ashok Jindal, Member (J) - (1.)THE appellant is in appeal against the impugned order wherein inputs service credit attributable to taxable as well as exempted services has been denied to the appellant.
(2.)BRIEF facts of the case are that appellant is a output service provider as well as engaged in the activity of trading during the period April, 2005 to March, 2010. Audit took place in the premises of appellant and audit objections were raised on 14.9.2010. As per audit objection that appellant has taken inputs service credit on common services which were used by the appellant in trading as well as providing output service to the tune of Rs. 4,10,320/ -for which appellant is not entitled to Cenvat credit. Therefore, a show cause notice was issued on 5.10.2010 to deny input service credit for the above services. Adjudication took place and demand of Rs. 4,10,320/ - was confirmed along with interest and equivalent amount of penalty was imposed under section 78 of the Finance Act, 1994. Commissioner (Appeals) also confirmed the adjudication order on this issue. Aggrieved from the said order appellant is before me.
Learned Counsel for the appellant submits that the explanation came on 1.4.2011 and as per explanation trading activity was treated as exempted services. As prior to 1.4.2011, the trading activity was not exempted service, therefore, appellant was under bona fide belief that they are entitled to take Cenvat credit in full, therefore they have taken the credit of Rs. 4,10,320/ -. He further submits that if at all Cenvat credit is to be denied that is to be denied in proportion as held by this Tribunal in the case of Orion Appliances Ltd. v. CST, Ahmedabad [ : 2010 (19) STR 205 (Tri -Ahmd)]. Therefore the proportionate credit is denied for Cenvat credit attributable to trading activity works out only to Rs. 17,718/ -. Therefore, he prayed that impugned order is required to be set aside for confirming the entire demand of Service tax of Rs. 4,10,320/ - instead of Rs. 17,718/ -. He also prayed that in these circumstances penalty is also not imposable.

(3.)ON the other hand learned AR submits that although the appellant is entitled to take proportionate Cenvat credit as held by this Tribunal in the case of Orion Appliances Ltd. (supra), but both the lower authorities have after due consideration held that appellant is required to reverse the Cenvat credit to the tune of Rs. 4,10,320/ -. If at all there is any calculation mistake, the matter may be remanded back to the adjudicating authority.
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