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TMI Blog2018 (7) TMI 409X X X X Extracts X X X X X X X X Extracts X X X X ..... nal adjustment is based on data for the relevant financial year. Accordingly, rule 6(3A) of Cenvat Credit Rules, 2004, while assuming that inputs used exclusively for manufacturing of exempt goods, can be isolated, acknowledges that inputs utilised for rendering of exempt services and input services used for provision of exempt services and exempted of input goods are not easily segregated. To the extent that input services have been used in common for dutiable and exempted goods, option of recourse to rule 6(3A) of CENVAT Credit Rules, 2004 cannot be denied - It is obvious that the adjudication order is based on the incorrect appreciation of the reasoning for such apportionment in the rules and the principle underlying the formula. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 6(3) of CENVAT Credit Rules, 2004 and, with effect from 1st April 2011, exercised the option under sub-clause (ii) of the said rule. With the finding that appellant was restricted only to two of the three options in rule 6(3) of CENVAT Credit Rules, 2004, Commissioner of Central Excise, Shillong vide order-in-original no. CCE//Shillong No.03/2017 dated 07.04.2017, confirmed recovery of ₹ 126,85,10,223/- being the amount payable at 6% of the value of exempted goods as obligated under rule 6(3)(i) of CENVAT Credit Rules, 2004. Aggrieved by this order, appellant is before us. 3. Having perused the records, it is seen that the impugned order has held the appellant ineligible for recourse to payment of such amount as is prescribed i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the manufacturer of goods or the provider of output service shall follow the following procedure and conditions, namely:- (a) while exercising this option, the manufacturer of goods or the provider of output service shall intimate in writing to the Superintendent of Central Excise giving the following particulars, namely:- (i) name, address and registration no. Of the manufacturers of goods or provide a default service; (ii) date from his the option under this clause is exercised or proposed to be exercised; (iii) description of duty when goods are taxable services (iv) description of exempted goods or exempted services; (v) CENVAT credit of inputs and input services lighting and balance as on the date of exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and removed plus the total value of taxable services provided cluster total value of exempted services provided during the preceding financial year and D denotes total CENVAT credit taken on inputs during the month minus A; xxxxxxxx 5. From the above, there can be no doubt that the scheme of provisional payment of tax at the end of each month with adjustment for actuals at the end of the year attaches significance to the proportion that the credit of inputs/input services bears to that the exempted output/output services has with that of the total output/output services. While the provisional tax is to be based on the data of the previous financial year, the final adjustment is based on data for the relevant financial year. Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n rule 6(3)(ii) of CENVAT Credit Rules, 2004. To arrive at that conclusion, the impugned order asserts that the formula in rule 6(3A) would come zero to be the numerator which while having a mathematical outcome was a practical impossibility in discharging of tax liability. 5. It would appear that the adjudicating authority has, in his wisdom and with his knowledge of mathematics, come to such conclusion. We, despite our limited knowledge, are unable to agree. The formula is a summation of credit of input used in exempt goods, the product of credit of inputs and proportion of value of exempted services to total turnover of services and dutiable goods and the product of credit of input services and proportion of exempted services and go ..... X X X X Extracts X X X X X X X X Extracts X X X X
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