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2014 (7) TMI 479 - AT - Central ExciseCENVAT Credit - reversal of credit towards exempted goods - demand of an amount @5%/10% of the sales value - common input services - Interest u/s 11AB - Penalty u/s 11AC - Held that:- The view of the department and the impugned order based on the same is absurd, as even if the appellant want to maintain separate account in respect of the services mentioned above, it would be impossible for them. Lex non cogit ad impossibilia is well settled legal principle and therefore, the option of maintaining separate account and inventory in respect of the services cannot be forced upon them. Moreover, Section 6(3) of the Rules, on account of retrospective amendment to this Rule, also gives an option to a manufacturer to reverse the proportionate credit in respect of the connated inputs/ input services used in or in relation to the manufacture of exempted final products, which the appellant in this case have done. In fact, the proportionate credit comes only to ₹ 13,231/- against which the credit reversed is ₹ 88,756/-. We are therefore of the view that the impugned order is not sustainable and as such, the appellant have a strong prima facie case in their favour - The requirement of pre-deposit of the amount demanded under Rule 6(3) of the Cenvat Credit Rules, interest thereon and penalty is, therefore, waived for hearing of the appeal and recovery thereof stayed - Stay granted.
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