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2024 (2) TMI 957 - CESTAT KOLKATACENVAT Credit - manufacturer of dutiable goods and conditionally/partially exempted goods - failure to properly bifurcate the input services, they have taken the Cenvat Credit towards the entire input services received - reversal of proportionate Cenvat Credit in respect of the input service used in the manufacture of partially exempted goods - demand of differential duty in respect of the partially exempted goods, i.e. normal rate of duty less 1% or 2% Excise Duty already paid by the Appellant - HELD THAT:- The issue is squarely covered by the case law of HELLO MINERALS WATER (P) LTD. VERSUS UNION OF INDIA [2004 (7) TMI 98 - ALLAHABAD HIGH COURT], wherein it has been held reversal of Modvat credit amounts to non-taking of credit on the inputs. Hence the benefit has to be given of the notification granting exemption/rate of duty on the final product since the reversal of the credit on the input was done at the Tribunal’s stage. Prior to this, the Hon’ble Supreme Court in the case of CHANDRAPUR MAGNET WIRES (P) LTD. VERSUS COLLECTOR OF C. EXCISE, NAGPUR [1995 (12) TMI 72 - SUPREME COURT] has held we see no reason why the assessee cannot make a debit entry in the credit account before removal of the exempted final product. If this debit entry is permissible to be made, credit entry for the duties paid on the inputs utilised in manufacture of the final exempted product will stand deleted in the accounts of the assessee. In such a situation, it cannot be said that the assessee has taken credit for the duty paid on the inputs utilised in the manufacture of the final exempted product under Rule 57A. Thus, the demand on the above is set aside. Cenvat Credit taken towards GTA Services backed up by proper documents - HELD THAT:- Matter remanded to the Adjudicating Authority. The Appellant is directed to submit all the documentary evidence. The Adjudicating Authority should follow the principle of natural justice and decide the issue within four months from the date of communication of this order - All the penalties on the Appellants and on the co-noticee, Mr. Satish Agarwal are set aside - Appellant is required to pay the confirmed demand, if any, on account of Cenvat taken on GTA Services, along with interest. However, the penalty on the same is set aside - appeal allowed in part and part matter on remand.
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