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2018 (7) TMI 777 - AT - Central ExciseCENVAT/MODVAT Credit - common inputs used in manufacture of exempted final products, some of which was reversed on proportionate basis, remaining part of Modvat credit was reversed after many years - Rule 57CC of Central Excise Rules, 1944 - period involved is 01.09.1996 to 31.03.1999 - in respect of one item, such reversal was made only in April, 2002. Held that:- At the relevant time, the entitlement of the appellants to reverse the credit to the extent of common inputs used in the manufacture of exempted final products was in doubt. However, subsequently Rule 57CCC was inserted in the Central Excise Rules, 1944 through Finance Act, 2010 for reversal of actual credit by the manufacturer availing the credit of specified duty in respect of inputs used for manufacture of final product, which are not chargeable to duty or chargeable to nil rate of duty by payment of amount equivalent to amount of credit attributable to inputs used in the manufacture of such final products - said amendment was retrospective in nature and covers the impugned period in this appeal. It has not been disputed by the Revenue that the appellants have reversed the credit taken in respect of inputs, though admittedly, one reversal of ₹ 34,827/- was made in April, 2002 and the other reversals were made before the issuance of show cause notice - the demand on account of disputed Modvat credit, which has already been reversed by the appellants, is liable to be set aside. In view of Rule 57CCC and statutory scheme introduced in Finance Act, 2010, the appellants are liable to pay an interest @24% per annum for the intervening period from the date of clearance of goods till the date of reversal of the said Modvat credit. The demand of interest is confirmed for the intervening period from the date of clearance of goods till the date of reversal of Modvat credit - demand of disputed Modvat credit and the penalty are dropped - appeal allowed in part.
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