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TMI Blog2024 (10) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... 13/2016-CE (NT) dated 01.03.2016, effective from 01.04.2016, by substituting Rule 6(3A) (b)(ii) of the Credit Rules, to consider only common input services and not total input service credit, for the purpose of computing the amount of reversal - It is observed that such amendment in Rule 6(3A) by virtue of substitution was clarified by the Board vide TRU Circular No. 334/8/2016-TRU dated 29.02.2016, to apply retrospectively. The clarification clearly mentioned that the provisions of Rule 6 providing for reversal of Credit in respect of input services used w.r.t. exempted goods/services, is being redrafted with the objective to simplify and rationalize the same without altering the established principles of reversal of such credit. The modality adopted by the Appellant for reversal of credit on proportionate basis is in accordance with the provisions of Rule 6(3A). Hence, the impugned order by upholding the demand on incorrect understanding of provision is erroneous and not sustainable. Extended period of limitation - HELD THAT:- There is no suppression of facts in the instant case. It is observed that the Appellant periodically intimated the department about their selection of opt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bed therein, under due intimation letter filed at the beginning of each Financial Year, to the Excise Range Office. 4. An Audit of the Appellant s records was conducted by the Department for the period April 2013 to March 2014. The audit team raised an objection that the Appellant had short reversed an amount of Rs. 2,93,347/- towards Cenvat credit under Rule 6(3)(b) of the C.C.R.2004 as the Appellant took into consideration only the credit on 'common input services' instead of total Cenvat credit. However, the aforesaid amount was deposited by the Appellant by way of reversal of Cenvat credit under protest. It was alleged that while reversing proportionate Credit under Rule 6(3)(ii), the Appellant had only considered the amount of Cenvat credit attributable to the common input services used in both-the manufacture of dutiable goods as well as provision of exempted service (i.e. trading), instead of taking into consideration the total Cenvat credit taken on all input services including the common input services, for the purpose of such reversal. Thus, it was alleged by the Department that such computation adopted by Appellant has resulted into short reversal of an amount de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the present case, the only dispute is whether the CENVAT Credit, availed on the input services used exclusively in the manufacture of the dutiable goods, was required to be included in the numerator for apportioning the common credit between the exempted service (trading) and dutiable goods. 12. This issue is no more res integra as it has been held that the CENVAT Credit, which pertains to input services exclusively used in dutiable goods, is not required to be included in the total CENVAT Credit for apportionment between exempted services and dutiable goods. It has been held that for apportionment of CENVAT Credit, only such credit which was availed on input service used commonly in exempted service and dutiable goods has to be taken into consideration. For this purpose reliance has been placed on the following decisions: (a) E-CONNECT SOLUTIONS (P) LTD. Versus COMMR. OF C. EX. CGST, UDAIPUR 2021 (376) E.L.T. 678 (Tri. - Del.) 17. The dispute in the appeal is regarding the interpretation of the term total Cenvat credit provided in the formula in Rule 6(3A)(b)(ii). According to the Department, the total Cenvat credit should include even those services used exclusively in taxable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n dutiable goods shall not be allowed. The Revenue is only interpreting the term total Cenvat credit provided under the formula. If the whole Rule 6(1), (2) and (3) is read harmoniously and conjointly, it is clear that Total Cenvat Credit for the purpose of formula under Rule 6(3A) is only total Cenvat credit of common input service and will not include the Cenvat credit on input/input service exclusively used for the manufacture of dutiable goods. If the interpretation of the Revenue is accepted, then the Cenvat credit of part of input service even though used in the manufacture of dutiable goods, shall stand disallowed, which is not provided under any of the Rule of Cenvat Credit Rules, 2004. (c) M/s. ThyssenKrupp Industries India Pvt. Ltd. Vs. Commissioner of CE ST, Pune-I [FINAL ORDER NO. A/85557-85558/2023 dated 10.02.2023] 13. The above ratio has also been applied in the Appellant s own case in the following decisions: (a) M/S HONDA CARS INDIA LTD., V. COMMISSIONER OF CGST CE [FINAL ORDER 40540/ 2020] (b) M/S HONDA CARS INDIA LIMITED V. COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX, CUSTOMS AND CENTRAL EXCISE, ALWAR [ FINAL ORDER 51046/2021] (c) M/S HONDA CARS INDIA LTD. V. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 6(3A): Thyssenkrupp Industrial Solutions (India) Private Limited vs. Commissioner of Central Tax, Mumbai, 2022 (6) TMI 468 CESTAT MUMBAI) JWC Logistics Park Pvt. Ltd. vs. Commissioner of Central Excise Service Tax, Raigad, 2022 (5) TMI 430 CESTAT MUMBAI Reliance Industries Limited vs. Commissioner of Central Excise Service Tax, Raigad, 2020 (9) TMI 787 CESTAT MUMBAI Deepak Fertilizers and Petrochemicals Corporation Ltd. vs. Commissioner of Central Excise Service Tax, Raigad, 2020 (7) TMI 486 - CESTAT MUMBAI Lotte India Corporation Ltd. vs. Commissioner of Central Excise, 2020 (3) TMI 307-CESTAT CHENNAI EID Parry India Ltd. vs. Commissioner of Central Tax Central Excise, Belgaum, 2019 (3) TMI 32 CESTAT BANGALORE Molex India Pvt. Ltd. vs. Commissioner of Central Tax, Bengaluru, 2019-TIOL-3205-CESTAT-BANG IBM India Pvt. Ltd. vs. Commissioner of Central Excise, Customs Service Tax, Bangalore, 2015-VIL-849-CESTAT-BLR-ST Commissioner of Central Excise and Service Tax, Chennai vs. Chennai Petroleum Corporation Ltd., Final Order No. 40009/2020 dated 06.01.2020 19. Therefore, in view of the aforesaid observations, we hold that the modality adopted by the Appellant for reversal of credit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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