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2022 (12) TMI 348 - AT - Central ExciseCENVAT Credit - common inputs and common input services which were used in the manufacture of the dutiable and exempted products - non-maintenance of separate records - pharmaceutical industry. Whether furnace oil used in the factory which gets consumed in the manufacturing process whether it is the manufacture of dutiable goods or exempted ones - HELD THAT:- The total amount of dispute of CENVAT credit which has been taken on this furnace oil and common input services is only Rs. 2,80,049/-. Evidently, the appellant would be entitled to part of the credit to the extent it was used in the manufacture of dutiable goods. Nevertheless, the appellant reversed the entire amount of CENVAT credit on these common inputs and input services. This fact was recorded in the reply to show cause notice itself. Therefore, the entire basis of the show cause notice that the appellant had taken CENVAT credit on common inputs and input services no longer exists. In the case of CHANDRAPUR MAGNET WIRES (P) LTD. VERSUS COLLECTOR OF C. EXCISE, NAGPUR [1995 (12) TMI 72 - SUPREME COURT], the Supreme Court has held that reversal of MODVAT credit after having taken it is as good as not taking the credit at all. In this case, similarly the credit taken by the appellant has been reversed and nothing survives. Therefore, the original adjudicating authority and the Commissioner (Appeals) were not correct in demanding an amount equal of 10% of value of the exempted goods under Rule 6 (3) of CCR. The impugned order cannot be sustained and needs to be set aside - Appeal allowed.
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