𝗖𝗘𝗦𝗧𝗔𝗧 𝗖𝗵𝗲𝗻𝗻𝗮𝗶 𝗥𝘂𝗹𝗶𝗻𝗴 𝗼𝗻 𝗖𝗘𝗡𝗩𝗔𝗧 𝗖𝗿𝗲𝗱𝗶𝘁 𝗮𝗻𝗱 𝗧𝗿𝗮𝗱𝗶𝗻𝗴 𝗔𝗰𝘁𝗶𝘃𝗶𝘁𝘆 📢 𝗧𝗵𝗲 𝗧𝗿𝗶𝗯𝘂𝗻𝗮𝗹 𝗿𝘂𝗹𝗲𝗱: “CENVAT Credit cannot be availed on trading activity, and the portion of credit attributable to trading must be reversed.”

🔍 𝗙𝗮𝗰𝘁𝘀: 𝗖𝗼𝗺𝗽𝗮𝗻𝘆: M/s. Sify Technologies Limited 𝗜𝘀𝘀𝘂𝗲: The appellant, engaged in providing network services and also selling bought-out goods, was availing input service tax credit on common services used for both taxable services and traded goods. A show cause notice alleged that the appellant failed to maintain separate books of accounts for taxable services and traded goods.

⚖️ 𝗝𝘂𝗱𝗴𝗺𝗲𝗻𝘁: The Tribunal ruled that the show cause notice lacked legal validity as it disregarded relevant laws for the period. Despite evidence of separate accounts, the adjudicating authority incorrectly demanded CENVAT Credit reversal for trading. Referencing similar rulings, the Tribunal found the demand unsustainable and allowed the appeal.

📜 𝗖𝗮𝘀𝗲 𝗜𝗻𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻: 𝗧𝗶𝘁𝗹𝗲: M/s. Sify Technologies Limited vs. The Commissioner of Central Excise & Service Tax 𝗦𝗲𝗿𝘃𝗶𝗰𝗲 𝗧𝗮𝘅 𝗔𝗽𝗽𝗲𝗮𝗹 𝗡𝗼. 703 of 2012 𝗢𝗿𝗱𝗲𝗿 𝗗𝗮𝘁𝗲: 15 June 2023 📜 This ruling underscores that CENVAT Credit is not permissible on trading activities, and any attributable portion must be reversed if trading and taxable services are involved.