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2014 (8) TMI 495 - AT - Central ExciseDenial of CENVAT Credit - Manufacture of dutiable and exempted goods by using common input Naphtha – separate accounts not maintained – Revenue demands 10% of the value of the exempted goods in terms of rule 6(3) and which amount is ₹ 3.55 crores & ₹ 2.15 crores respectively - Held that:- law was retrospectively amended for providing for reversal of credit attributable to inputs used in the manufacture of exempted goods and if reversal was done along with interest for such delayed reversal, the provisions for demanding amount @ 10% of the value of the exempted goods would not apply. In the present case, the appellant has reversed the credit, though belatedly, in respect of the inputs alleged to have been used in the manufacture of exempted product. There is no doubt that they have done the reversal but they have paid interest @ 13%, which was the prevalent rate at such time. As per the provisions of Finance Act, 2010 the reversal has to be done along with the interest liability @ 24% per annum from the due date of reversal till the actual date of reversal of credit. To that extent, the contention of the Revenue that interest liability should be discharged @ 24% per annum is sustainable. Verification of the quantum of credit - Held that:- If the credit has not been reversed, the same was ordered to be done within a period of four weeks from the date of receipt of communication. The said ratio applies to the facts of the present case also. Even though, the appellant has not filed any application as stipulated in the Finance Act, 2010 in the present case, inasmuch as they have reversed the credit of duty paid on naphtha used in the manufacture of exempted goods, the same benefit should be granted to the appellant subject to terms and condition prescribed thereunder. It is an admitted position that the appellant as reversed the credit. The appellant is directed to discharge interest liability @ 24% per annum from the due date of reversal of credit to the actual date of reversal done by them in accordance with law. The applicant is directed to produce a C.A. certificate certifying the credit required to be reversed and the credit actually reversed along with interest thereon. On submission of such certificate, the adjudicating authority shall reconsider the matter and grant the benefit provided in the Finance Act, 2010 with respect to reversal of credit on inputs used in the manufacture of exempted product. - Decided in favour of assessee.
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