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2016 (8) TMI 286 - CESTAT NEW DELHI

2016 (8) TMI 286 - CESTAT NEW DELHI - TMI - Demand of interest on reversal of Cenvat credit - common input service Held that:- interest required to be paid appeal dismissed - decided partly in favor of revenue. - Excise Appeal No.E/995/2008 EX [DB], Excise Appeal No.E/1301/2008 EX [DB] - FINAL ORDER No. 52500-52501/2016 - Dated:- 4-7-2016 - S. K. Mohanty, Member (Judicial) And R. K. Singh, Member (Technical) For the Appellant : Shri. Yogesh Agarwal, D.R. For the Respondent : Shri. Archi .....

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are used for manufacture of dutiable as well as exempted goods. 2. The ld. Advocate for the respondent pleaded that the appellant took total credit of ₹ 4,17,918/- on common input services which it reversed even prior to the issuance of the Order-in-Original. Therefore, the Revenue s appeal has no substance. He cited the judgment in the case of Jost s Engineering Co. Ltd. vs. CCE, Mumbai-III 2015 (320) ELT 157 (Tri.-Mum.). 3. Regarding the appeal filed by the respondent assessee the ld. Ad .....

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iable goods was reversed prior to the issuance of the primary adjudication order. In the case of Jost s Engineering Co. Ltd. (Supra) (in para 5.2) the Hon ble Tribunal dealing with similar circumstances held as under:- 5.2 In the present case it is an admitted fact the appellant did not maintain separate accounts for the input services used in or in relation to the manufacture of product dutiable as well as exempted products even though they maintained such accounts in respect of inputs. Therefo .....

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her words, the appellant reversed the entire credit taken along with interest thereon. Therefore, Rule 6(3)(i) will not have any application, when a credit is taken wrongly and the same is reversed along with interest as it tantamounts to non-taking of the credit. The Hon ble High Court of Allahabad in the Hello Minerals. Water (P) Ltd. case cited supra clearly held that reversal of Modvat credit amounts to non-taking of credit on the inputs and even if such reversal was done after the clearance .....

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if reversal of credit is done in respect of inputs used in the manufacture of exempted final products. In view of these decisions, we are of the considered view that the reversal of credit by the appellant on the entire service tax taken along with interest thereon both in respect of dutiable goods as well as exempted goods amounts to non-availing of credit and, therefore, the provisions of Rule 6(3)(i) are not attracted and the confirmation of demand by the adjudicating authority directing the .....

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