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2020 (7) TMI 698 - AT - Central ExciseReversal of CENVAT Credit - input materials and input services are used both in or in relation to the manufacture of dutiable and exempted goods - Rule 6 of the Cenvat Credit Rules - appellant had exercised the option of availing Rule 6(3)(i) of the Cenvat Credit Rules for the year 2008-09 by making payment as per the said provision in April 2008 - bar from altering of said option - HELD THAT:- This issue came up for consideration before a Co-ordinate Bench of the Tribunal in M/S. MERCEDES BENZ INDIA (P) LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE-I [2015 (8) TMI 24 - CESTAT MUMBAI]. In this case the allegation was that the assessee while reversing the amount of cenvat credit and paying the interest had not followed the procedure as laid down in subrule 3A(a) and (b) of the Cenvat Credit Rules respectively, inasmuch as they had neither exercised these option by intimating the same in writing to the Superintendent of Central Excise giving required particulars nor had they determined and paid any amount provisionally for every month. Thus by not following laid down procedure as envisaged the assessee becomes liable to calculate and pay amount equivalent to 5% of the value on exempted services. There is no requirement under Rule 6(3)(i) and Rule 6(3A) of the Cenvat Credit Rules that the option had to be exercised on the first day of the financial year or the first month thereof. On the contrary, the said provisions clearly indicate that such option could be exercised at any point of time during a financial year by a manufacturer. The only restriction under Explanation-I of Rule 6(3) is that once such option is exercised, the same has to be continued with during the remaining part of the financial year. Thus, there has been due compliance by the appellant of the requirements under rule 6(3) and (3A), including the procedure laid down therein and the appellant has legally and validly availed the option in terms of Rule 6(3)(ii). The Commissioner has therefore erred in holding that the appellant had not fulfilled the conditions of procedure laid down in Rule 6(3) and Rule 6(3A) of the Cenvat Credit Rules and that the appellant was not entitled to avail option under Rule 6(3)(ii) of the Cenvat Credit Rules - Even otherwise, the demand confirmed under Rule 6(3)(i) of the Cenvat Credit Rules by the Commissioner choosing such option in the show cause notice cannot be sustained. Appeal allowed - decided in favor of appellant.
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