The issue of cenvat credit on common input services for manufacturing, services and trading activity is full of contradiction. It is beyond the competence of any person to advise you on the issue which involves the integration of taxes which are not possible under the present federal system of Indian Constitution. The Honourable Supreme Court is the guardian of the Indian Constitution. Therefore, the clear picture of the present issue would emerge either the legislature make laws or the court interpret the intention of the legislature or pass any order in their wisdom.
Department view and Tribunal ruling-
In the case of Colgate Palmolive (I)Ltd. Vs Comm of Central Excise, Mumbai, reported in 2007 (7) S.T.R. 294(Mumbai) the department