Trading Not Exempted Service Before 2011: CESTAT Quashes CENVAT Credit Demand and Penalty

CESTAT (Customs, Excise, and Service Tax Appellate Tribunal) quashed a "CENVAT Credit demand and penalty," ruling that "trading was not an exempted service before 2011." The tribunal clarified that prior to the 2011 amendment to the CENVAT Credit Rules, trading activity was not explicitly listed as an 'exempted service'. Therefore, CENVAT credit taken on inputs or input services used for trading purposes before this amendment could not be denied or penalized. This decision provides historical clarity on service tax implications for traders and reduces their past liabilities.