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TMI Blog2024 (10) TMI 890X X X X Extracts X X X X X X X X Extracts X X X X ..... nd dutiable goods has to be taken into consideration. In order to bring parity with the underlying objective of Rule 6, Rule 6(3A) of the Credit Rules was amended vide Notification No. 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 - the impugned o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 determined under Rule 6(3A) of the C.C.R.2004. 5. Based on such audit objections, a Show Cause Notice [SCN] dated 03.04.2018 was issued to the Appellant, proposing to recover the short-paid amount of Rs. 13,63,338/- determined under Rule 6(3A)(b) of the C.C.R.2004, along with interest and penalty. The relevant part of the allegation in the SCN is as follows: Input Servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the impugned Order-in-Appeal No.NOI-EXCUS-002-APP-920-19-20 dated 02.09.2019, upheld the demand as well as penalty. Being aggrieved, the Appellant has filed the present appeal before the Tribunal. 9. Heard both the sides and perused the appeal records. 10. We find that in 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. 11. 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. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is clearly provided that entire credit in respect of receipt and use of inputs/input service is allowed when such input and input service is used in dutiable final products and taxable service. However, nowhere in Rule 6 it is provided that the input or input service used in 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] 12. The above ratio has also been applied in the Appellant s own case in the followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en, as is attributable to the exempted goods/services and under no circumstances this part can be greater than the whole credit. 17. Further, in the following decisions where similar proposition was laid down regarding the interpretation of the term Total Cenvat credit in Rule 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- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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