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2016 (3) TMI 804 - AT - Central ExciseCenvat credit on input services used for both excisable goods as well goods chargeable to nil rate of duty - non maintenance of separate records in respect of common services used for the excisable finished goods and exempted finished goods - revenue sought to recover an amount equal to 10% of the value of the exempted goods in terms of sub rule 6 (3) (i) of Rule 6 of the Cenvat Credit Rules, 2004 - Held that:- Revenue is not at liberty to impose any of the options given in Rule 6 (3) of Cenvat Credit Rules, on the appellant. Even if the appellants failed to exercise the option and failed to follow due procedure, such failure does not take away substantial right of the appellant. In view of the above offer of the appellant to reverse proportionate ineligible credit in terms of Rule 6 (3) (ii) of the Cenvat Credit Rules has merit. It is further observed that the appellants had already reversed certain amounts but they have not paid interest as yet. The Counsel for the appellant has accepted to pay the interest applicable on ineligible credit which is required to be reversed. In view of the above, it is seen that no option under Rule 6 (3) can be imposed on the appellant and the appellants offer of availing the option of proportionate credit in terms of Rule 6 (3) (ii) cannot be denied to them. However, they will be liable to pay interest on the amounts which are reversed. The order-in-original is set aside and the matter is remanded to Commissioner to calculate the amount required to be reversed and the interest payable thereon.
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