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2023 (10) TMI 349 - AT - Central ExciseRecovery of Central Excise duty alongwith interest and penalty - attribution of the impugned ‘taxable services’ in production of ‘rectified spirit’ and of ‘kraft paper’ along with manufacture of ‘sugar’, ‘molasses’ and ‘denatured spirit’ that are cleared on payment of duty - availability of option other than the one resorted to by the adjudicating authority - HELD THAT:- The coverage of partial, and conditional exemption, as a bar to retention of credit, in terms of rule 6 of CENVAT Credit Rules, 2004 is no longer res integra. The Tribunal in M/S. SHARDLOW INDIA LTD. VERSUS CCE, CHENNAI–II [2017 (8) TMI 1162 - CESTAT CHENNAI] has held that In similar case, where the goods were cleared to M/s. Space Centre and M/s. Baba Atomic Research Centre in the case of COMMISSIONER OF CENTRAL EXCISE, THIRUNELVELI VERSUS DCW LTD. [2008 (10) TMI 380 - MADRAS HIGH COURT], the jurisdictional High Court has considered that the said goods cannot fall under the category of exempted goods as provided in Rule 57CC(1) of the erstwhile Central Excise Act, 1944. In M/S. MERCEDES BENZ INDIA (P) LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-I [2015 (8) TMI 24 - CESTAT MUMBAI], the Tribunal held that we do not understand that when the appellant have categorically by way of their intimation opted for option provided under sub-rule (3)(ii), how Revenue can insist that option (3)(i) under Rule 6 should be followed by the assessee. Thus, it is not in doubt that any of the options may be chosen by the assessee - the recovery under rule 14 of CENVAT Credit Rules, 2004 restricted to such amount as is computed by the appellant herein. There is no reason to sustain the penalty imposed under section 11AC of Central Excise Act, 1944 as there is no allegation of evasion of duty otherwise payable on account of non-availability of sufficient credit on clearance of dutiable goods - the impugned order is modified to limit recovery by any method then available under rule 6 of CENVAT Credit Rules, 2004 to be exercised by the appellant herein within 30 days of receipt of this order and to the extent of tax attributable to ‘input service’ used in manufacture of ‘rectified spirit’ during the relevant period. Appeal disposed off.
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