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2023 (3) TMI 63 - AT - Central Excise
CENVAT Credit - traded goods - exempt goods or not - cenvat credit was availed on the common input service attributed to the dutiable goods as well as exempted service (trading activity) - appellant was admittedly reversing the proportionate credit attributed to the trading activity along with interest - applicability of Rule 6(3) of CCR - HELD THAT:- The facts of the present case is that though initially the appellant have taken the cenvat credit on the common input service which were used for manufacture of dutiable goods as well in relation to exempted service i.e. trading activity, however, on pointing out by the department, the appellant have calculated the proportionate credit in respect of common input service attributed to the trading activity and paid the same along with interest. After payment of such proportionate credit, the situation became as if no cenvat credit was taken in respect of common input service attributed to the trading activity as held by the Hon’ble Supreme Court in the case of CHANDRAPUR MAGNET WIRES (P) LTD. VERSUS COLLECTOR OF C. EXCISE, NAGPUR [1995 (12) TMI 72 - SUPREME COURT].
In Rule 6(3) from the different options provided to the assessee in addition to 6/7% payment an option for proportionate reversal of the credit is also provided. This tribunal time and again taken a view that whether option is availed in advance or later stage it is prerogative to the assesse to choose any one of the option - Therefore, merely because the appellant at the relevant time did not opt for any of the option, revenue cannot impose upon the appellant a particular option i.e. payment of 6/7% of the value of the goods/service.
Therefore, once it is admitted fact that the appellant have reversed the cenvat credit in respect of common inpout service attributed to the trading activity and also paid the interest thereon at the relevant time, no demand of 6/7% of the value of the trading activity will sustain - Appeal allowed.