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2015 (4) TMI 809 - AT - Central ExciseWaiver of pre deposit - Denial of CENVAT Credit - Non Maintenance of separate accounts - Penalty u/s 78 - Held that:- The appellant had used certain common input services in or in relation to providing of taxable and exempted service. Since they had not maintained separate accounts and inventory of the input services meant for taxable and exempted service, the department invoking Rule 6(3)(i) has demanded an amount equal to 8%/6% of the value of the exempted services i.e. 8%/6% of the rent received from letting out of the immovable property for residential purposes. However, during the period of dispute, in this case, Rule 6(3) had been amended w.e.f. 1.3.2008 to provide an additional option to a manufacturer / output service provider to reverse the credit attributable to the inputs/input services used in or in relation to the manufacture of exempted final products /provisions of exempted services. In this case, there is no dispute that the appellant have already revered the cenvat credit of ₹ 74,177/- along with interest of ₹ 18,730/- attributable to the input services used in or in relation to providing the exempted service. - In view of this, the impugned order confirming the demand of ₹ 78,57,162/- from the appellants under Rule 6(3) (i) of the Cenvat Credit Rules, 2004 along with interest and imposing penalty of equal amount is prima facie incorrect, more so, in view of the judgment of the Karnataka High Court in the case of CCE, Mangalore Vs. Kudremukh Iron & Steel Co. Ltd. (2011 (4) TMI 950 - KARNATAKA HIGH COURT ) - Stay granted.
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