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2023 (6) TMI 789 - AT - Service TaxCENVAT Credit - common input service used for taxable as well as exempt goods - mainly case of Revenue is that even though the respondent had paid back the full amount attributed to exempted service along with interest, they are liable to pay 8%/6%/5% of the value of exempted service for the reason that respondent have not maintained separate accounts. HELD THAT:- On this issue much water has been flown and in various cases, the Courts and Tribunal held that once the Cenvat credit of the common inputs used in relation to exempted service is reversed along with interest, the demand of 8%/6%/5% in terms of Rule 6(3) will not sustain. The Commissioner has also taken support from one of the land mark judgment in the case of CHANDRAPUR MAGNET WIRES (P) LTD. VERSUS COLLECTOR OF C. EXCISE, NAGPUR [1995 (12) TMI 72 - SUPREME COURT] wherein it was held that even though the modvat credit was availed but subsequently the same is reversed along with interest situation become as if no Cenvat credit is availed. Accordingly the benefit of notification was extended. Thus, the demand of 8%/6%/5% cannot be made in the facts of the present case when the respondent has admittedly paid back the entire Cenvat credit along with interest which was partly attributed to exempted service - the demand is not sustainable - appeal of Revenue dismissed.
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