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2018 (3) TMI 398 - AT - Central ExciseReversal of CENVAT credit - Rule 6 (3) (b) of CCR - it was alleged that M.S Coils/ HR sheets used for manufacture of such pipes were exclusively used for manufacture of exempted final products being of specific grade and were even separately stored hence could not be treated as common input used for manufacture of dutiable or exempted goods - Held that: - as far as demand of cenvat credit of ₹ 1,01,25,986/- is concerned the Appellant has already reversed the 8%/10% amount on the value of exempted goods in terms of Rule 6 (3). We find that even though the inputs has been exclusively used in exempted goods, the assessee cannot be forced not to pay the amount in terms of Rule 6 (3) and instead reverse the credit. Further it is to be seen that apart from said input i.e HR Coils and MS Plates the Appellant has used common inputs i.e welding electrodes, welding wires, flux, oxygen gas, grinding wheels etc. in manufacture of exempted goods and thus reversed the amount in terms of Rule 6 (3) (b). In such circumstances it cannot be said that all the inputs are for exclusive use in exempted final products. The Rule 6 (1) and Rule 6 (3) (b) both cannot be applied in case of such clearances. Demand of ₹ 64,40,555/- made on the ground that they have used common inputs and hence liable to pay 8%/10% amount in terms of Rule 6 (3) (b) eventhough they have maintained the separate account and the proportionate credit was reversed by them at the time of clearance - Held that: - where the Appellant has reversed the proportionate credit and has also maintained separate accounts of inputs used in such exempted goods, they cannot be forced to pay the amount in terms of Rule 6 (3) (b). It is apparent from the record that the major item i.e MS Plates and HR sheets account was separately maintained and in case of common inputs the credits were proportionately reversed. Further in terms of retrospective amendment to rule 6 of the Cenvat Credit Rules by Section 73 of the Finance Act, 2010 as long as the assessee reverses the proportionate cenvat credit, the same is considered as sufficient compliance with Rule 6 - demand not sustainable. Demand u/s 11D - Held that: - the show cause notice has nowhere alleged that the said amount has been represented as excise duty by the Appellant. Hence the Board Circular No.599/36/2001-CE dt. 12.11.2001 is not applicable - demand not sustainable. Appeal allowed - decided in favor of appellant.
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