Inputs as such clearing

This query is : Resolved

hari (Querist)
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16 March 2016 during the course of audit the department demanding reversal of input cenvat credit under rule 6 against inputs as such clearing done by us saying it is a trading activity and trading is an exempted service. Please advise whether it is right or we have to fight. Thanks in advance

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Hari

Nilesh

Nilesh (Expert)
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16 March 2016 Prima facie dept is right, however you can say this is not trading since goods bought for manufacturing purpose only however since the goods needed by customer on urgent basis we have sent and in case of trading of goods - goods are bought for resale purpose only.., further in case u decided to apply Rule then dont pay 6% instead go for proportionate formula