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2021 (11) TMI 299 - AT - Central ExciseReversal of CENVAT Credit - appellant manufactures both dutiable goods and exempted goods. - Common inputs - The appellant has not availed Cenvat credit on inputs used exclusively in manufacture of exempted goods. - Not only is the furnace oil a common input procured jointly for all the products, it is also used to generate steam which is further used for manufacture of dutiable as well as exempted products. The steam is used both for extraction of herbs and for production of sugar syrup. The sugar syrup is in turn used for manufacture of goods dutiable and exempted products. HELD THAT:- The retrospective amendment made by Finance Act, 2010 allowed the assessee to reverse proportionate amount of Cenvat credit. They had to file a declaration, which the appellant did. The appellant reversed the amount with interest. The appellant has, according to the learned counsel, debited the amount of Cenvat credit accordingly. The quantity of dutiable and exempted products manufactured by the appellant are a matter of record. The quantity of furnace oil attributable to unit quantity of each of those products is a technical matter. The appellant has used the technical report to debit and there is nothing in the Commissioner’s order to show that the calculations were wrong and more or less of furnace oil was attributable to the production of exempted goods and if so, by how much. Whether the appellant can be compelled to choose one of the options under Rule 6 of Cenvat Credit Rules, 2004. - HELD THAT:- It is not permissible for the Department to foist an option under Rule 6 upon the assessee as has been done in the impugned orders. For this reason also the impugned orders cannot be sustained and need to be set aside. We also note that there is no provision in the Central Excise Act or Cenvat Credit Rules, 2004 whereby an amount under Rule 6(3) can be recovered from the assessee. Section 11A of the Act provides for recovery of duty. Rule 14 of the CENVAT credit Rules provided for recovery of irregularly availed CENVAT credit. Any demand under Rule 14 of CENVAT Credit Rules, 2004 for recovery of an amount under Rule 6(3) therefore, is without the authority of law and hence needs to be set aside regardless of the merits of the case. Since the confirmation of the demands cannot be sustained under Rule 6(3), the demand for interest and imposition of penalty also need to be set aside.
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