Availing CENVAT credit in respect of common inputs and input services and using the same in processing of goods

M/s INDUSTRIAL HEAT TREATERS Vs CC&E, - (CESTAT, Mumbai) (2013-TIOL-1756-CESTAT-MUM)
Facts:
Applicant had availed excess credit in respect of the input services which are used in the processing of the goods, which were cleared on payment of appropriate service and part of the goods are cleared at nil rate of Service Tax by claiming the benefit of exemption Notification No.8/2005-S.T. dt. 1.3.2005. Demand was confirmed on the ground that applicant availed credit in respect of common inputs and input services which are used in the processing of goods, which were cleared on appropriate payment of Service Tax and part benefit of Notification No. 8/2005-S.T.
The contention of applicant was that the applicants cleared the part of the processed goods by claiming the benefit of notification No. 8/2005- S.T. and the goods were returned to the principal and principal cleared the goods on payment of appropriate excess duty or by availing the benefit of small scale exemption notification.
Held:
In the present case, the applicants are undertaking process which does not amount to manufacture and in view of this the applicants are clearing part of their processed goods on payment of appropriate service tax. Accordingly, appellant prima facie will be liable to pay 6%/8% of the price of the exempted services as per the provisions of Rule 6 of the CCR and Pre-deposit to be made out.