CENVAT RULES APPLICABLITY WHEN ASSESSEE IS ENGAGED IN 'TRADING ACTIVITY' AND PROVIDING 'OUTPUT SERVICES'

There is no provision in the Rules to cover a situation where an assessee is providing a taxable
service and also undertaking another activity which is neither a service nor a manufacturing
activity. In such a situation, the correct legal position is to choose and segregate the quantum
of 'input services' attributable to trading activity and exclude the same from the records maintained
for availment of credit. The above proportionate reduction can be done once in a quarter or in six
months, by applying the standard accounting principles.