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2020 (11) TMI 490 - AT - Central ExciseReversal of CENVAT Credit - common inputs used for taxable as well as exempt goods - non-maintenance of separate records - Ammonia - intermediate goods/captive consumption - Sl.No.86 of Notification No.12/2012 - period of dispute is April, 2015 to Jan. 2016 and Feb., 2016 to March, 2016 - Extended period of Limitation - HELD THAT:- Evidently, when the appellant clears part of Ammonia being Surplus, on payment of duty, admittedly, the final product being cleared is Ammonia. Therefore, Ammonia becomes the dutiable goods manufactured by the appellant. Majority of the Ammonia so produced, however, is used as an intermediate product and consumed for the manufacture of Urea. Thus, the final product of the appellant is Urea and SSP (exempt). Thus, the captively consumed Ammonia cannot be treated as exempted final product by any stretch of imagination. The final product of the appellant is Ammonia, Urea and SSP, value of which has been taken for computation under Rule 6 (3A). Revenue is trying to stretch the law in disregard to express provisions of the Act and the Cenvat Credit Rules. Rule 6(3)(i) provides for payment of an amount equal to 6% of value of the exempted goods and 7% of value of the exempted services; or (ii) pay an amount as determined under sub-rule (3A); or (iii) maintain separate accounts - It is further provided under Rule 6(3A) (b) to apply the standard formula for calculating the amount to be reversed or the ineligible Cenvat Credit. Rule 6 is attracted only in case, where an assessee manufacturers two output goods or is rendering two output services, where one is exempt and the other dutiable. Further, Statute is very clear, under the Rule 6(3)(ii) read with Rule 6(3A), which clearly provides for eligibility of input services in or in relation to the manufacture of exempted goods, and its clearance upto the place of removal shall be calculated proportionately - it is evident from the plain reading of the Rule that it speaks about the goods manufactured and removed during the financial year, and the intermediate products emerges during the manufacture of exempted final products. Extended period of Limitation - HELD THAT:- The issue being wholly interpretational, extended period of limitation is not invokable. The case of the Revenue is mis-conceived and the show cause notice is bad - Appeal allowed - decided in favor of appellant.
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