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2020 (1) TMI 530 - AT - Central ExciseCENVAT Credit - manufacture of dutiable final product and electricity wheeled out to the State grid - non-maintenance of separate records - assessee claims to have maintained separate records in respect of the inputs consumed in its Power Division and Carbon Black Division, having no common inputs - whether the assessee is required to pay 5%/6% of the sale value of electricity wheeled out to the state grid, under Rule 6(3)(i) of the CCR? HELD THAT:- Lex non cogit ad impossibilia is a well settled legal principle and we see merit in the contentions of the assessee that separate records in respect of common inputs could be maintained only when two final products are manufactured. Within the power division it was not possible to segregate the inputs at the stage of receipt itself, based on the ultimate use of the power post its production/generation. It is undisputed that the assessee had been making reversal of the proportionate cenvat credit attributable to inputs consumed in the power division to the extent power was sold to the State grid, at the end of each month and the same is also evident from the annexure to the notices - the reversal of such proportionate cenvat credit in respect of inputs used within the power division at the end of each month is sufficient compliance with the provisions of Rule 6(2) of the CCR in letter and spirit. Reversal of proportionate cenvat credit in respect of the common input used in the manufacture of exempted goods is an option duly permitted under Rule 6(3)(ii) of the CCR itself. Non-compliance with the procedure prescribed under Rule 6(3A) of the CCR does not result in the manufacturer losing his substantive right to avail the option of reversing proportionate credit, as such procedural lapse is condonable and denial of substantive right on such procedural failure is unjustified. Appeal allowed.
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