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2018 (12) TMI 428 - AT - Central ExciseCENVAT Credit - common input and input services used for dutiable and exempted final products - non-maintenance of separate account - Rule 6(3) of CCR - extended period of limitation - Scope of SCN - Held that:- Admittedly reversal of proportionate credit was made much before issue of show-cause notice. Show-cause notice doe not reveal as to how the matter has gone to the knowledge of the department or brought to the notice of the parties but order-in-original at para 2 indicates that during the course of audit, it was noticed that assessee had availed cenvat credit on common inputs and input services which are used in the manufacture of dutiable as well as exempted final products - there is force in the submission of ld. Counsel for the appellant that it had not availed credit of duty paid on common inputs and the dispute is therefore restricted to availment of cenvat credit on common input service. Extended period of limitation - Held that:- The respondent department has not disputed the figures of proportionate payment but order-in-original reveals that in not giving such intimation/option, the assessee has suppressed the material fact that they have availed cenvat credit on common input services which was noticed only during audit, for which extended period of limitation as envisaged in proviso to Section 11A(1) prior to 08.04.2001 and Section 11A(4) with effect from 08.04.2001 is justifiably invocable. Statutory audit procedure - Held that:- It cannot be said that only because audit party had found non-maintenance of separate records appellant is to be tasked for suppression etc. In exercise of option as contemplated in Rule 6(3A), the assessee has to choose either of those options, and non-intimation of such exercise of option can only be treated as mere procedural lapse. Further, nowhere in the said procedure it has been mentioned that in the event of such intimation not being given, tax liability at the higher rate would be applicable to the assessee for which the order passed by the Commissioner confirming 6% liability against proportionate availment of 1.33% credit is not sustainable. Appeal allowed - decided in favor of appellant.
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