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2018 (5) TMI 1048 - AT - Central ExciseCENVAT creidt - common inputs/input services used for dutiable as well as exempt goods - non-maintenance of separate records - rule 6 (3) of CCR - Held that - respondent having reversed the entire CENVAT credit attributable to the common inputs and input services, the question of confirmation of an amount under Rule 6(3) does not arise - issue covered by the decision in the case of JOST S ENGINEERING CO. LTD. Versus COMMISSIONER OF CENTRAL EXCISE, MUMBAI-III 2013 (8) TMI 463 - CESTAT MUMBAI , where it was held that once the entire CENVAT credit on the common inputs services is reversed the question of confirmation of demand of an amount equivalent to 6% of the value of the goods does not arise - appeal dismissed - decided against Revenue.
Issues involved:
Confirmation of demand of an amount calculated @ 6% of the value of exempted goods cleared using common inputs and input services. Analysis: The appeal was filed by Revenue against the Order-in-Appeal passed by the Commissioner of Central Tax. The case revolved around the respondent availing CENVAT credit on common inputs and input services without opting for any options under Rule 6 and not maintaining separate accounts. The Revenue contended that 6% of the value of exempted goods cleared using common inputs should be reversed. The adjudicating authority confirmed the demands, but the first appellate authority accepted the respondent's contentions based on previous Tribunal decisions. The first appellate authority considered Rule 6(2) and (3) of the CENVAT Credit Rules, 2004, and held that the option to avail or exercise the provisions of Rule 6(3) is procedural. The respondent had reversed the entire CENVAT credit attributable to common inputs and input services, making the confirmation of an amount under Rule 6(3) unnecessary. The issue was also supported by a previous Tribunal case. The respondent's action of reversing the entire credit taken on input services was considered as tantamount to non-availing of credit, as per various judicial decisions cited. The Tribunal upheld the impugned order, rejecting the appeal. The Revenue argued that the respondent's intention to avail CENVAT credit on common inputs services for the entire period seemed erroneous. However, the Tribunal found that the respondent's reversal of the entire CENVAT credit on common inputs services rendered the confirmation of demand of an amount equivalent to 6% of the value of goods unnecessary. The Tribunal referenced a previous case where it was held that once the entire CENVAT credit on common inputs services is reversed, the demand confirmation does not arise. The first appellate authority's analysis of Rule 6(2) and (3) of the CENVAT Credit Rules, 2004, along with previous Tribunal decisions, supported the respondent's position. The Tribunal concluded that the respondent's reversal of the entire credit taken on input services amounted to non-availing of credit, aligning with established judicial interpretations. In conclusion, the Tribunal upheld the impugned order, stating that it was correct and did not require any interference. The appeal was rejected, affirming the decision in favor of the respondent based on the reversal of the entire CENVAT credit on common inputs services and the non-availing of credit as per relevant legal provisions and judicial precedents.
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