HC
dismisses assessee’s appeal against CESTAT order which upheld reversal of
proportionate credit by automobile dealer on input service attributable to
trading activity pre-2011 in terms of CENVAT Credit Rules, 2004 (CCR); Assessee
contended that, CCR were amended from April 1, 2011 to provide that exempted
services include 'trading' and formula was given, hence, trading cannot be
considered as ‘exempt service’ prior to said date; Observes, absent any
provision to cover situations where an assessee is providing a taxable service
and undertaking another activity which is neither a service nor manufacture,
the only correct legal position is to segregate quantum of input service
attributable to trading activity and exclude the same from the input credit
records, which may be done once in a quarter/six months; Rejecting assessee’s
argument that there was no mechanism to reverse credit once taken, challenge to
method of calculation and invocation of extended limitation period, states
that, assessee was well aware of ‘service tax liability’ and ‘eligible service
tax inputs’ and that claim was excessive and unjustified; Remarks further that,
“lack of any method in the rules in such cases, would only mean that a
reasonable and logical principle should be applied, not concededly that what
should and could not be claimed as input credit, ….ought to be “left alone”
because of the composite nature of the assessee’s business” : Delhi HC
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