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2023 (1) TMI 505 - AT - Central ExciseComputation of proportionate credit determined under rule 6(3A) of the 2004 Credit Rules - by taking the value of common input services used in both taxable and exempted services OR total credit taken on all input services, including the common input services - goods sold to related persons or not - HELD THAT:- Reliance placed on the decision in the case of COMMISSIONER OF CENTRAL EXCISE & ST, RAJKOT VERSUS M/S. RELIANCE INDUSTRIES LIMITED [2019 (3) TMI 784 - CESTAT AHMEDABAD], the Tribunal observed that for the purpose of calculation of Cenvat credit reversal, in the formula, total Cenvat credit shall mean credit of only common input service and not of input service exclusively used for the manufacture of dutiable product on which the Cenvat credit is eligible to the respondent in its entirety. It needs to be noted that in the present case also, the appellant has not taken credit on the input and input services used in provision of exempted services. Thus, the decision of the Tribunal in M/S NATIONAL STEEL & AGRO INDUSTRIES LIMITED VERSUS PRINCIPAL COMMISSIONER, CENTRAL GOODS & SERVICE TAX & CENTRAL EXCISE - UJJAIN [2021 (6) TMI 60 - CESTAT NEW DELHI] rendered for the period prior to 2016 will apply to the facts to the present case, where it was held that Since the appellant has followed Rule 6(2) and has not taken any CENVAT credit on the input services which were used exclusively for providing exempted services, the formula under Rule 6(3A) can only be used to only proportionately divide the credit taken on common input services and deny credit to the extent it is attributable to the exempted service viz., trading during the periods relevant to both appeals, viz., 2015-16 and April 2016 to June 2017. The order passed by the Commissioner (Appeals), therefore, deserves to be set aside to the extent it has confirmed the demand attributed to input services used in clearance of exempted products with penalty, and is set aside - appeal allowed.
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