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2024 (1) TMI 446 - AT - Central ExciseReversal of proportionate CENVAT Credit - electricity so generated in the power plant is partly used by the appellant within the factory and the excess portion is wheeled out to various other entities - case of Revenue is that the reversals done by the appellant was not in accordance with law and the amount reversed was much less than what had to be reversed as per Rule 6(3A) of CCR, 2004 - period 2014-2015 and 2015-2016 - HELD THAT:- As seen from Rule 6(1), its clear that cenvat credit cannot be allowed on inputs and input services that are exclusively used for exempted goods or services. Therefore, Rule (3A) needs to be enforced in order to determine the extent of cenvat credit reversal when common inputs or services are used in both dutiable and exempted goods/services. The fact that the reversal was done as per the above Rule and promptly intimated the department is not in dispute; the only dispute with regard to above Clause (c)(iii) of Rule 6(3A) where the credit attributable to the exempted goods needs to be calculated as per the formula M/N*P where P denotes the total credit taken on input services during the financial year. The Commissioner in the impugned order rejects the appellant’s contention that the total credit here refers to only the common services which are attributable to dutiable and exempted goods. This issue now stands settled in view of the amendments made to the CCR 2004 vide Notification No. 13/2016-C.E. (NT) dated 01.03.2016 wherein it has been clarified that the formula refers to the common inputs/input services for ascertaining the credit to be reversed on exempted products. The Tribunal in the case of M/S E-CONNECT SOLUTIONS (P) LTD. VERSUS CENTRAL EXCISE AND CENTRAL GOODS & SERVICE TAX, UDAIPUR [2020 (11) TMI 282 - CESTAT NEW DELHI] observed that It would be clear from a conjoint reading of sub-rules 6(1), (2) and (3) of Rule 6 that the total Cenvat credit for the purpose of formula under Rule 6(3A) is only total Cenvat credit of common input service and cannot include Cenvat credit on input service exclusively used for the manufacture of dutiable goods. The impugned order is set aside - the appeal is allowed.
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