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2013 (2) TMI 34 - HC - Central ExciseCENVAT Credit – Rule 6 of CCR, 2002 - Maintence of separate account – Reversal of CENVAT Credit - Clearance of such final product under notification No.29/2004 and 30/2004 - Assessee receives either total or conditional/partial exemption from payment of duties - Assessee utilized duty paid inputs for production of exempt as well as non-exempt final products – Department argued that reversal of credit must be before utilization of the input - the assessee is not entitled to retain Cenvat Credit on the inputs used in manufacturing of final product, which is exempt from payment of duty Held that:- Manufacturing not intending to maintain separate accounts had to follow the procedure provided in Rule 6(3), sub-rule (a) or (b) as the case may be. In cases falling under Rule 6(3)(a), there was only requirement of payment of amount of CENVAT credit attributable to inputs used in or in relation to manufacture of the final product at the time of clearance from the factory. It was only under subrule (3)(b) which does not cover the cases falling under Rule 6(3)(a) that the manufacturer had to pay a flat rate of duty. In all cases falling under Rule 6(3)(a) the only requirement was that the manufacturer should pay an amount equivalent to Cenvat Credit attributable to inputs used in the manufacture of such exempted final product The exempt product manufactured by the assessee fell in sub-clause (vi) of Rule 6(3)(a). The assessee was therefore entitled to avail Cenvat Credit on the duty paid on the final product as long as in respect of inputs used in manufacturing of exempt goods, he followed the procedure laid down in Rule 6(3)(a). The contention of the Revenue that such reversal of the credit must happen before utilisation of inputs in the manufacture of exempt goods, would not stand in view of the retrospective amendment in Rule 6, which, as noted above, by virtue of introduction of sub-rule (7) permitted the assessee to pay the Cenvat Credit at the time of or even after clearance of the goods. In favour of assessee
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