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2019 (2) TMI 12 - AT - Central ExciseCENVAT Credit - Incorrect reversal of cenvat credit attributable to exempted goods by considering the weight of the final product and not considering the quantum of inputs used in the manufacturing activity - Held that:- When there is an embargo to avail credit on inputs used for manufacture of exempted products, the appellant cannot contend that the credit would be eligible since the waste and scrap is cleared on payment of duty - the demand of ₹ 1,29,52,945/- on this issue is legal and proper and does not require interference. CENVAT Credit - Incorrect reversal of credit for LPG / Furnace oil used in the manufacture of exempted goods, by incorrect adoption for value of exempted goods - Non reversal of input services credit for exempted goods manufactured - Sep 2005 to March 2008 - Held that:- Even prior to 1.4.2008, when the CENVAT Credit Rules bars availing of credit on inputs used for exempted products and also lays down procedure for reversal of proportionate credit, the appellant had to arrive at the value of clearances by taking into consideration the value of free supplies as well as amortized cost - also the appellant has used the funded machinery for dutiable goods and has paid royalty to VSSC for such use. All these aspects have to be considered while arriving at the value of exempted clearances - All the aspects have to be considered while arriving at the value of exempted clearances - matter require to be remanded to the adjudicating authority for reworking the exempted clearance and that has to be reversed by the appellant. Non reversal of input services credit for exempted goods manufactured - period after 1.4.2008 - Held that:- The appellant fairly concedes the demand in this regard. They only contest the inclusion of the entire amortized value of plant and machinery funded by VSSC, on the grounds, inter alia that the impugned plant and machinery was also used to manufacture dutiable goods for customers other than VSSC - for the purpose of reworking the credit that has to be reversed under this issue, the matter remanded along with the above two issues to the adjudicating authority. Penalty - Held that:- All these issues are in the nature of interpretation of law or have resulted from mistakes and inadvertent errors on calculating the amounts to be reversed - the penalties imposed on all the issues cannot sustain and require to be set aside. Appeal allowed in part - part matter on remand.
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