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2021 (10) TMI 1285 - AT - Central ExciseCENVAT Credit - manufacture of dutiable as well as exempted goods - P&P medicines, falling under the chapter 30 of the Central Excise Tariff Act, 1985 - requirement to pay 10%/5% of the value of exempted goods in term of Rule 6 (3) (i) of Cenvat Credit Rules, 2004 - time limitation - interest - penalty - HELD THAT:- Once the assessee reversed the proportionate credit in respect of input and input services attributed to the exempted final product and paid interest if any for the delayed reversal no further demand such as 10%/5% of value of the exempted goods can be raised. The appellant have argued that during the relevant period the retrospective amendment in Cenvat Credit Rules vide Section 73 Finance Act, 2010 was inforce according to which only proportionate credit along with interest was supposed to be reversed. It is found that even as per the said amended provision there is no substance in the case of the department for demanding 10%/5% of the value of the exempted goods. Time Limitation - HELD THAT:- Since the appellant have been declaring the details of cenvat credit availed even in respect of common input services used for the manufacture of dutiable as well as exempted goods in their records and also filed ER-1 Return wherein the availment of cenvat credit was disclosed, no suppression of fact or willful misstatement, fraud or collusion or contravention of provision to evade payment of duty can be attributed to the appellant. Therefore, the demand of extended period is not sustainable also on the ground of limitation. The demand of an amount equal to 10%/5% of exempted value is not sustainable. Interest - penalty - HELD THAT:- The appellant has reversed the credit amount of ₹ 21,95,293/- along with interest which is maintained and remaining demand and interest there on, and entire penalty are set aside. Appeal allowed.
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