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2016 (12) TMI 436 - AT - Central ExciseCenvat Credit - common inputs and input services - reversal under Rule 6(3) of the Cenvat Credit Rules - The appellants have contended that the formula prescribed for the period after 1.4.2011 should be adopted for the period prior to 1.4.2011 - trading activity - Held that: - the issue regarding interpretation of sub-rule (5) of Rule 6 of Cenvat Credit Rules, 2004 is no longer res integra. In view of the above, respectfully following the decisions of the Tribunal on the issue, we hold that benefit of Rule 6(5) of Cenvat Credit Rules, 2004 cannot be extended in respect of trading activities. The said credit needs to be reversed in proportion to the trading turnover and the total turnover. Further, it was contention of the appellant, related to the credit availed at depot, that they are need to be divided in the proportion of the value addition happening at the depot/office level after clearance from factory in respect of manufactured goods and the value addition happening at the depot/office level in respect of traded goods. If the argument of the learned Counsel is accepted and the value addition happening at the stage of manufacture and services used therein need to be considered, then the entire Service Tax credit taken at factory also needs to be apportioned. In view of the above, the argument of the learned Counsel does not hold much water. Formula - method for determination of amount of credit to be reversed - Held that:- it can be seen that even the method prescribed for the period after 1.4.2011 is inherently erroneous. - The formula prescribed for the period after 1.4.2011 does not provide reasonable estimate of the credit attributable to the exempted and dutiable activities. Furthermore the formula sought to be adopted by the appellants is not the formula prescribed for the period after 1.4.2011. In these circumstances we hold that the credit availed at various places registered as ISD needs to be apportioned in the ratio of the exempted and other sales, as has been done by the Revenue. Extended period of limitation - The appellants have not reversed any credit on their own and only when they were investigated that they have reversed as per their own calculation. There was no doubt regarding liability to reverse. In this appeal also they are contesting merely the quantification and not liability to reverse. In these circumstances the extended period has been rightly invoked. - Appeal dismissed. - Decided against the assessee.
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