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2022 (8) TMI 1153 - CESTAT AHMEDABADReversal of CENVAT Credit - common input service attributed to taxable as well as exempt goods - activity of manufacture of its own, manufacture on job work basis - clearance of inputs in as such condition - trading of goods on High Seas Basis - Rules 6 of Cenvat Credit Rules, 2004 - applicability of N/N. 214/86-CE dated 25.03.1986 - suppression of facts or not - time limitation. Goods on job work basis - HELD THAT:- The appellant have manufactured goods on Job work Basis in terms of Notification No.214/86-CE dated 25.03.1986. In terms of Rule 3 of Cenvat Credit rules, 2004, it is specifically provided that input and input service used in the manufacture of job work goods under Notification No. 214/86-CE, the credit is admissible. In view of basis explicit provision credit of input or input service used in relation to job work goods cannot be denied - the demand related to manufacture of job work goods is clearly not sustainable. Trading of Goods on High Seas Basis - time limitation - suppression of facts or not - HELD THAT:- This issue has been raised by the auditors and auditors accepting that the proportionate credit in respect of common input service attributed to Trading of Goods on High Seas Basis should be reversed and the appellant complying with the direction of CERA Audit, they have reversed the proportionate credit of Rs. 5,857/-. In this peculiar fact no further demand invoking Rule 6 can be raised. Moreover, the activity of Trading of Goods on High Seas Basis was clearly in the knowledge of the department. Therefore, no suppression of fact can be alleged against the appellant. Hence, the demand is also not sustainable on the ground of time bar. Trading of goods by way of removal of input as such - HELD THAT:- Undisputedly the removal of input as such was made on payment of duty in terms of Rule 3(5) of Cenvat Credit Rules, 2004. As per this provision for all the purposes the removal of goods is treated as removal of goods of payment of duty. In this clear position by any stretch of imagination, it cannot be said that the goods cleared on payment duty is exempted goods or service. Therefore, there is no application of Rule 6(3) for payment of an amount as prescribed therein. The demand raised in terms of Rule 6 of Cenvat Credit Rules, 2004 by both the Lower Authorities is not sustainable - Appeal allowed - decided in favor of appellant.
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