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2023 (8) TMI 1232 - AT - Central ExciseReversal of CENVAT Credit - manufacture of dutiable as well as exempted goods - common services (input services) attributed to both dutiable and exempted goods - proportionate credit for final exempt product reversed - once the appellant have reversed the proportionate Cenvat credit on common input service attributed to the exempted final product, whether, the appellant are liable for payment of 10%/6%/5% of the value of such exempted goods? HELD THAT:- This issue is no longer res-Integra as even though the reversal was made on proportionate input service attributed to the exempted goods at a latest stage along with interest the situation became as if no Cenvat credit was availed. Consequently, the demand of 10%/6%/5% cannot be sustained. In the case of PI INDUSTRIES VERSUS COMMISSIONER OF CENTRAL EXCISE & ST, SURAT-II [2023 (6) TMI 455 - CESTAT AHMEDABAD] this Tribunal has held that if the assessee reverse the Cenvat credit in respect of common input service used in the manufacture of exempted goods the demand equal to 10%/5% will not sustain. In view of the catena of judgments and many more judgments cited by the Learned Counsel, the issue is no longer res-Integra as in a case where assessee avails the Cenvat credit on common input service and the same is used for exempted as well as dutiable goods and even at a later stage the assessee reverse the proportionate credit with payment of interest, if there is any delay in reversal of such credit the demand of 10%/6%/5% shall not sustain. Thus, the appellant are not liable for payment of an amount equal to 10%/6%/5% of the value of the exempted goods. Hence the same is set aside. However, the reversal of the proportionate credit along with interest paid by the appellant is correct and the same is maintained. Appeal allowed.
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