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2023 (7) TMI 48 - AT - Central ExciseCENVAT Credit - inputs i.e. sugar and input services viz manpower supply agency services and other common services - benefit of effective rate of duty of 1% was not available to them and they should have paid duty at the effective rate of 5% as per Sl. No. 11 of Notification No. 2/2011-CE dated 1.3.2011 under Chapter Sub Heading 2202 9020 - HELD THAT:- This is a case in which the appellant had opted for benefit of exemption under Notification No. 1/2011-CE dated 1.3.2011 to discharge duty at 1% - It is found that, in the year 2011, vide Union Budget, the earlier exemption granted to ‘fruit pulp or fruit juice-based drinks’ was withdrawn and the said goods were subject to duty at the following concessional rates exercisable at the option of the assessee. (a) @1% vide Notification No. 01/2011-CE dated 1.3.2011 subject to condition that no CENVAT credit was taken on the inputs / input services used to manufacture the said goods. (b) @5% vide Notification No. 02/2011-CE dated 1.3.2011 with no restriction as to availment of CENVAT credit on inputs or input services. Although the appellant had opted to pay duty on fruit pulp or fruit juice based drinks at 1% under Notification No. 1/2011-CE, they had initially availed CENVAT credit. However, they have on their own reversed Rs.42,00,866/- being the proportionate CENVAT credit availed on the inputs and input services on dutiable aerated waters and beverages and exempted fruit pulp or fruit juice based drinks. This has been confirmed in the Range Officers verification report dated 15/04/2013 - as per the decision of the Hon'ble Supreme Court in CHANDRAPUR MAGNET WIRES (P) LTD. VERSUS COLLECTOR OF C. EXCISE, NAGPUR [1995 (12) TMI 72 - SUPREME COURT], once the appellant has reversed the ineligible credit, the claim for exemption of duty on the disputed goods cannot be denied and they are hence eligible to discharge duty at 1% as per Notification 1/2011-CE. The appellant was eligible for payment of effective rate of duty of 1% on the ‘fruit pulp or fruit juice based drinks’ cleared by them, during the impugned period, by availing exemption under Notification No. 1/2011-CE dated 1.3.2011 - the issue relating to interest and penalty does not survive - Appeal allowed.
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