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2020 (2) TMI 1367 - AT - Service TaxReversal of CENVAT Credit - Appellant had deposited service tax amount - common input services used in taxable as well as exempt goods - Rule 6 of the Cenvat Credit Rules, 2004 - demand of service tax alongwith interest and penalty - HELD THAT:- It is found from impugned order that the appellant had deposited the service tax amount in respect of the Cenvat credit taken for providing the trading activities. Since, the Cenvat credit amount towards trading of goods was paid by the appellant, it has to be construed that no Cenvat credit was at all taken by the appellant in respect of the common input services. Hon’ble Supreme Court in the case of Chandrapur Magnet Wires (P) Ltd. Vs. Collector of Central Excise, Nagpur [1995 (12) TMI 72 - SUPREME COURT] have ruled that on reversal of credit, the assessee cannot be said to have taken credit of duty on the inputs utilized in the manufacture of exempted final products. However, the appellant is liable to compensate the government exchequer by paying the interest amount between the period of taking Cenvat credit on the common input services and actual payment of such cenvat amount into the Central Government account. The impugned order is set aside to the extent it has confirmed the service tax demand and imposition of penalties on the appellant - impugned order sustains, insofar as it has confirmed the interest demand on the appellant - the appeal is partly allowed.
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