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2016 (7) TMI 430 - CESTAT CHENNAI

2016 (7) TMI 430 - CESTAT CHENNAI - 2016 (46) S.T.R. 871 (Tri. - Chennai) - Cenvat Credit - input services used for export of goods - reversal of proportionate cenvat credit relating to exempted goods cleared every month as mandated under Rule 6 (3A) and Rule 6 (3) (ii) of CCR - but they had reversed only part amount during the period from April 2011 to September 2011, rendering a short reversal of proportional input service credit - Held that:- The fact that the export of yarn has been made and .....

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various Tribunal and I find that in the facts and circumstances of the case, credit is eligible and no reversal of credit is warranted. - Demand set aside - Decided in favor of assessee. - Appeal No.E/41267/2015 - FINAL ORDER No.41075/2016 - Dated:- 6-7-2016 - SHRI P.K.CHOUDHARY, JUDICIAL MEMBER Shri M. Saravanan, Consultant, For the Appellant Shri L. Paneerselvam, AC (AR), For the Respondent ORDER M/s.Bannari Amma Spinning Mills, Unit-II Dindigul, the appellant herein, are engaged in the manufa .....

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the provisions of Cenvat Credit Rules, 2004. However, they did not maintain separate cenvat credit accounts for dutiable and exempted clearances. On verification of the cenvat credit documents, it was noticed that the assessee had not reversed properly the proportionate cenvat credit relating to exempted goods cleared every month as mandated under Rule 6 (3A) and Rule 6 (3) (ii) of CCR, but had reversed only part amount during the period from April 2011 to September 2011, rendering a short rever .....

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pellant-assessee had been using the common input services in the manufacture of both dutiable and exempted final products and were paying/reversing the amount attributable to input services used in or in relation to manufacture of exempted goods in terms of Rule 6 (3) (ii) of CCR read with Rule 6(3A) of CCR. A show cause notice dt. 4.6.2013 was issued to the appellant proposing recovery of ₹ 3,20,096/- being wrongly availed cenvat/short reversal of input service tax credit attributable tow .....

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he OIO and confirmed the demand as proposed in the notice. Hence this appeal filed by appellant before Tribunal. 2. Shri M.Saravanan, Ld. Consultant appearing on behalf of the appellant submits that the dispute is with regard to service tax credit taken by the appellant on input services. The contention of the Revenue is that input services were used for both dutiable and exempted activities and hence proportionate credit @ 57.94% has to be reversed as per Rule 6 (3A) of the CCR 2004. He submits .....

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the above services were used exclusively for dutiable activity i.e. for export and no part of the services were used for domestic clearances, they are eligible for 100% credit. Hence the proportionate credit reversal of ₹ 3,34,227/- [57.94% on ₹ 5,76,851/-] is not payable by the appellant. He submits that out of the total credit of ₹ 4,59,104/-, after deducting the above proportionate credit reversal amount of ₹ 3,34,227/- not payable by them, the balance credit to be re .....

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Rs.18,025/- (iv) Courier Services (Export) Rs.38,484/- (v) Commission Agency Ser.(Export) Rs.5,35,149/- (vi) Testing & Analysis Services Rs.293/- (vii) Forex Advisory Services Rs.3,218/- Total Rs.6,06,431/- 2.2 Ld. counsel also submits that as per Rule 6(5) of CCR, till 31.3.2011, the appellants are eligible to take 100% cenvat credit on the following services, as it is used for both dutiable as well as exempted activity :- S. No. Category of Service Amount (Rs.) 1. Repair and Maintenance Se .....

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₹ 19,762/- relating to excess reversal made by the appellant during the year 2010-11, which was taken as recredit as per Rule 6(3A) (f) of CCR 2004, he submits that they are not liable to reverse the proportionate credit amount of ₹ 11,450/- [57.94% on ₹ 19,762/-] as it pertains to the year 2010-11 and not relating to any service received during the period of dispute. 2.4 He submits that the invocation of extended period is not applicable in this case as the dispute is with re .....

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