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2018 (12) TMI 165 - AT - Central ExciseCENVAT Credit - input services used in or relation to the generation of electricity sold outside the factory - the proportionate cenvat credit on input services used in relation to generation of Steam and Fly-Ash (exempt goods) reversed - Rule 6(3) of Cenvat Credit Rules, 2004 - time limitation - demand under Rule 6(3) of Cenvat Credit Rules for the period prior to April, 2010 in view of retrospective amendment by the Finance Act, 2010 - whether the demand confirmed by the Revenue under Rule 6(3) i.e. 5%/10% on value of exempted goods is legal and proper? Held that:- The appellant is not disputing that the cenvat credit in respect of input services attributed to exempted goods namely Steam, Fly-Ash and non excisable goods i.e. electricity sold outside their factory, is not admissible and they have admittedly reversed the proportionate cenvat credit and also paid the interest from the date of taking credit till the date of reversal. The appellant rightly availed the option of Sub Rule 3(A) of Rule 6 of CCR, 2004, the only lapse on the part of the appellant is that the payment of cenvat credit was made belatedly, however the appellant have paid interest for the period right from availing the cenvat credit till the payment/reversal of proportionate cenvat credit which create a position as if the appellant have not availed cenvat credit right from the date when cenvat credit was availed. Therefore there is no reason for imposing option under Clause (i) of Rule 6(3) i.e. payment of 5%/10% of the value of exempted goods - the demand confirmed equal to 5%/10% of value of the exempted goods is not sustainable. Time Limitation - Penalty - Held that:- Since the issue regarding reversal of cenvat credit under Rule 6(3) is contentious and various cases on the same issue have been made out which can be seen from such of judgment given above, therefore, on the issue related to Rule 6(3) particularly in the facts of the present case it cannot be said that the appellant had malafide intention to evade payment of duty. Therefore, demand for the extended period is also hit by limitation for the same reason the penalties imposed are also unsustainable. The proportionate credit paid by the appellant along with interest is sufficient compliance under Rule 6(3), accordingly the same is maintained - demand under Rule 6(3)(i) i.e. 5%/10% of value of the exempted goods and all the penalties are set aside - appeal allowed - decided in favor of appellant.
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