CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL BANGALORE REGIONAL BENCH - COURT NO. 2 Central Excise Appeal No. 592 of 2012 (Arising out of Order-in-Original No. 126/2011-CE (Commr) dated

30.11.2011 passed by the Commissioner of Central Excise and Service Tax, Large Taxpayers Unit, Bangalore.)

M/s. Toyota Kirloskar Motor Pvt. Ltd., Plot No. 1, Bidadi Industrial Area, Ramanagaram Dist.

Bengaluru Urban, Karnataka – 562 109. ……….Appellant(s)

VERSUS Commissioner of Central Excise and Central Tax, Bengaluru West, BMTC Building, Banashankari II Stage, Bengaluru Urban, Karnataka – 560 070. ………..Respondent(s)

WITH (i) Central Excise Appeal No. 27549 of 2013 (Toyota Kirloskar Motor Pvt. Ltd.,)

(Arising out of Order-in-Appeal No. 179/2013 dated 31.07.2013 passed by the Commissioner (Appeals), Large Taxpayers Unit, Bangalore.)

(ii) Central Excise Appeal No. 21442 of 2014 (Toyota Kirloskar Motor Pvt. Ltd.,)

(Arising out of Order-in-Appeal No. 02/2014 dated 30.01.2014 passed by the Commissioner (Appeals), Large Taxpayers Unit, Bangalore.)

(iii) Central Excise Appeal No. 20203 of 2018 (Toyota Kirloskar Motors Private Limited)

(Arising out of Order-in-Appeal No. 101 & 102/2017/LTU dated

17.05.2017 passed by the Commissioner (Appeals), Large Taxpayers Unit, Bangalore.)

(iv) Central Excise Appeal No. 20204 of 2018 (Toyota Kirloskar Motors Private Limited)

(Arising out of Order-in-Appeal No. 101 & 102/2017/LTU dated

17.05.2017 passed by the Commissioner (Appeals), Large Taxpayers Unit, Bangalore.)

Appearance:

Mr. N. Anand, Advocate for the Appellant.

Mr. P. Saravana Perumal, Addl. Commr. (AR) for the Respondent.

Coram:

Hon'ble Mr. P.A. Augustian, Member (Judicial)

Hon'ble Mr. Pullela Nageswara Rao, Member (Technical)

Final Order Nos. 21548-21552 /2025 Date of Hearing: 18.12.2024 Date of Decision: 17.06.2025 Per : Pullela Nageswara Rao The Appeal No. E/592/2012 is filed against the Order-in-Original No.126/2011-CE(Commr) dated 30.11.2011 passed by the Commissioner of Central Excise and Service Tax, Large Taxpayers Unit, Bangalore and the Appeal Nos. 27549/2013, 21442/2014, 20203, 20204/2018 are filed against the respective Orders-in-Appeal passed by the Commissioner (Appeals), Large Taxpayers Unit, Bangalore.

2. The brief facts are the appellant M/s. Toyota Kirloskar Motor Pvt., Ltd., the Appellant is engaged in manufacture and clearance of Multi Utility Vehicles (MUVs) and parts thereof and utilized the CENVAT credit of duty paid on various inputs as well as capital goods and input services. During the course of audit, it is observed that apart from the activity of manufacture of Multi Utility Vehicles (MUVs), passenger cars and parts thereof, Appellant is also undertaking various other activities such as trading, merchant export, private bonded warehouse, etc. In few cases, the Appellant had taken full CENVAT credit of service tax paid on certain input services even though the said services were commonly used/utilized for the manufacture of the multi utility vehicles and for other activities such as trading, merchant export, private bonded warehouse etc. Thus, alleging that Appellant availed ineligible CENVAT Credit, for the period September 2005 to March 2010 proceedings were initiated and a show cause notice (SCN) was issued. The Appellant denied the allegations/proposals in the notice and contended that during the period of dispute trading was not construed as "exempted goods/services" and there was no mechanism provided for proportionate reversal and that the amendment to Rule 2(e) to Cenvat Credit Rules, 2004 w.e.f. 01.04.2011 was only prospective. Further the activity in the capacity of merchant-exporter (which is export of goods by the Appellant) cannot be construed as "exempted activity" and hence cenvat credit attributable to said merchant-export activity was not liable for reversal/payment. After excluding the value of merchant-export activity, the total cenvat credit attributable to trading for the entire period of dispute was computed as Rs.17,27,035