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TMI Blog2015 (10) TMI 2325X X X X Extracts X X X X X X X X Extracts X X X X ..... input services namely, man power recruitment service, telephone service, goods transport agency services, courier services, housekeeping cleaning services and technical testing and analysis service in or in relation to the manufacture of dutiable final product as well as exempted final products. However, they were not taking the cenvat credit in respect of these input services in proportion to the turnover of the exempted final product. During the period of dispute, they were foregoing the cenvat credit in respect of the 6 common input services mentioned above to the extent of 70%, based on the ratio of the turnover of dutiable and exempted final product during the previous financial year. During the previous financial year, out of the tot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e exempted final product during the previous financial year and accordingly out of total cenvat credit of Rs. 15,52,417/- involved on the common input services mentioned above, they have foregone the credit of Rs. 10,86,692/- and have only taken the credit of Rs. 4,65,725/- in proportion to the use of the common services in or in relation to the manufacture of dutiable final product and hence, the provisions of Rule 6(2) have been complied with and accordingly, the provisions of Rule 6(3)(b) would not be applicable, but this plea was not accepted on the ground that the condition of maintaining separate account and inventory of the input services for use in exempted and dutiable final product has not been maintained. Against this order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded an amount equal to 10% of the sale value of the exempted final product only on the ground that a separate account and inventory of the input services meant for dutiable final product has not been maintained, that this stand of the Department would not be correct in view of retrospective amendment to Rule 6(3) by Finance Act, 2010, which gives the manufacture an additional option of reversal of the proportionate cenvat credit attributable to the exempted final product, that when the appellant have already foregone the proportionate credit attributable to the exempted final product, the provisions of Rule 6(3) read with rule 6(2) stands complied with and hence, the amount equal to 10% of the sale value of the final product cannot be deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant did not maintain separate account and inventory of the input services meant for dutiable and exempted final product as per the provision of Rule 6(2) the provisions of Rule 6(3)(b) providing for payment of an amount equal to 10% of sale value of the exempted final product would be applicable. 6.1. In our view w.e.f. 01.03.2008 Rule 6(3) had been amended to give an additional option to a manufacture manufacturing dutiable as well as exempting final product by using common cenvat credit availed input/ input services and this additional option was to reverse the proportionate cenvat credit attributable to input/ input services used in or in relation to manufacture of exempted final product. The proportionate amount of cenvat credit att ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the provisions of sub Rule (3) of Rule 6 and hence, there cannot be any demand of amount under Rule 6(3)(b). The judgment of Honble Bombay High Court in case of CCE Thane-I vs. Nicholas Piramal (India) Ltd.(Supra) is of the period when the retrospective amendment to Rule 6(3) by Finance Act, 2010 had not been made and hence, this judgment of Honble High Court is not applicable to the facts of this case. In view of the retrospective amendment introduced by Finance Act, 2010, the appellant were entitled to reverse the proportionate cenvat credit attributable to the quantum of input services used in or in relation to manufacture of exempted final product and by foregoing this credit, they have complied with this obligation. In view of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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