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2022 (9) TMI 63 - AT - Central ExciseValidity of SCN - Reversal of CENVAT Credit - cenvatable inputs (explosives) are used by Maihar Cement Unit I in the manufacture of dutiable products (clinker and cement), as well as exempted goods i.e., limestone - non-maintenance of separate accounts for inputs used in the manufacture of dutiable and exempted goods - revenue neutrality - Rule 6(3)(b) of Cenvat Credit Rules - HELD THAT:- The show cause notices are misconceived for any demand under Rule 6(3)(b)/6(3)(i) due to the admitted fact that the appellant have admittedly reversed the proportionate credit on input/explosives for limestone cleared from the captive mines to Unit-2. Rule 6 provides for a mechanism to reverse Cenvat credit either proportionately, if it can be calculated, and in the alternative, if the same cannot be calculated with ease, the rule provides for reversal of Cenvat credit taken on common inputs by reversing a specified percentage of the sales/transfer value of the exempted product. Such reversal is restricted to the opening balance of credit in the Cenvat account at the beginning of the period as modified by Cenvat credit taken during the accounting period. The appellant have reversed the proportionate Cenvat credit in terms of Rules 6 (3)(ii) of CCR, thus, there is no application of Rule 6 (3)(i). It is further found that the situation is wholly revenue neutral, as both the units under common management and ownership are paying duty on their dutiable finished product namely cement and clinker. In case, duty was paid in terms of Rule 6(3)(i), the same was available as credit to unit 2 as input credit. Appeal dismissed - decided against Revenue.
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