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2023 (10) TMI 876 - AT - Central ExciseCENVAT Credit - manufacture of sugar and molasses - Clearance of bagasse and pressmud (exempted products), emerging during the manufacture of the final product (sugar) - non-maintenance of separate accounts for the common input services used in the manufacture of both dutiable and exempted products contravention of provisions of Rule 6 of the CENVAT Credit Rules, 2004 - HELD THAT:- In terms of Explanation 1 to Rule 6 of the CENVAT Credit Rules, which was inserted with effect from 01.03.2015, the appellant has to reverse the credit or pay 6% of the value of the exempted products in case non-excisable goods are cleared for a consideration. The Board had also issued a Circular in line with the above Explanation. However, the said Circular came to be challenged before the Hon’ble High Court of Allahabad in the case of Balrampur Chini Mills Ltd. [2019 (5) TMI 972 - ALLAHABAD HIGH COURT] and the same was held to be invalid and quashed. The Tribunal in a recent decision in the case of Khedut Sahakari Khand Udyog Mandli Ltd. [2022 (4) TMI 1360 - CESTAT AHMEDABAD] has followed the above decision of the Hon’ble Allahabad High Court to set aside the demand. The demand cannot sustain and requires to be set aside - Appeal allowed.
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