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2018 (3) TMI 506 - AT - Service TaxApplicability of Rule 6 (3) (i) of CCR 2004 - CENVAT credit - provision of taxable as well as exempt services - non-maintenance of separate records - Held that: - Admittedly, the appellant chose to follow payment of 5% in terms of Rule 6 (3) (i) for exempted goods. However, when pointed out later, that the same will apply for exempted services also (trading) the appellant chose to come out the scheme and pay the full duty liability on the exempted goods post 2011 and also reverse full credit of common input services post 01/04/2011, proportionate Cenvat credit pre 01/04/2007. On these facts, we note that the appellant did proceed and follow the option of reversing the credit on proportionate basis or full credit on common input services which satisfies the condition for one of the options under Rule 6. Admittedly, reversal of credit of proportionate amount prior to 01/04/2011 on common input services and fully post 01/04/2011 and payment of full duty liability on goods otherwise eligible for Notification 64/95-CE (post 2011) substantially satisfies the condition to be followed by an assessee in case of availing credit on common input services. The Hon’ble Supreme Court in CCE & CUS vs. Precot Meridian Ltd. [2015 (11) TMI 323 - SUPREME COURT] examining reversal of credit after a period of almost 6 years held that such subsequent reversal will amount to non-utilization of credit and consequences of such non-utilization will follow. The appellants cannot be asked to pay 5% of value of exempted services when they have reversed proportionate/all the credit available on common input services - appeal allowed - decided in favor of appellant.
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