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2019 (4) TMI 169 - AT - Central ExciseCENVAT Credit - common inputs / input services used both in the manufacture of dutiable products as well as exempted goods - non-maintenance of separate records - sub-rule (3) of Rule 6 of Cenvat Credit Rules, 2004 - Department was of the view that the appellants had not exercised option to pay proportionate credit on inputs / input services used in manufacture of exempted goods - Held that:- When the manufacturer is not maintaining separate accounts for the common inputs used for manufacture of exempted as well as dutiable products, they have to comply with the provisions under sub-rule 3 (i) or (ii) of Rule 6 of CCR 2004. Thus, if the assessee is intending to pay an amount equivalent to cenvat credit attributable to inputs and input services as per the Explanation I in the said rule, they have to exercise the option and such option will be applicable to all the exempted goods / services of the assessee. Whether the said option is procedural or mandatory? - Held that:- The Tribunal in the case of Mercedes Benz India (P) Ltd. [2015 (8) TMI 24 - CESTAT MUMBAI] had occasion to analyse the similar facts and held that the aid requirement of exercising the option is only a procedural one. The main intention of this provision of law contained in sub-rule 3 of Rule 6 is that the assessee, who is not able to maintain separate accounts for common inputs / input services used, shall not avail cenvat credit on the inputs / inputs services used in manufacture of exempted goods - In the present case, appellants have informed vide their letter dt. 20.07.2009 that they intend to reverse cenvat credit on monthly basis on the inputs / input services used for production of electricity that is wheeled out to TNEB. As per the Explanation I of the said rule, the said option once exercised would be applicable to all the exempted goods manufactured by the appellant. On such score, the letter given by the appellant would be sufficient intimation to the department that they intend to avail the option stated in sub-rule 3 (ii) of Rule 6 of CCR 2004. Time Limitation - Held that:- The SCN has been issued much later after two years on 22.5.2013 only. When the appellant has reversed the credit and intimated the department, the allegation that the appellant has suppressed the facts with intention to evade payment of duty / tax is unjustified - Appeal succeeds on limitation also. Demand do not sustain - appeal allowed - decided in favor of appellant.
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